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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Friday, January 7 2000

Daily Brady Bond Trading Commentary

Mexico's consumer price index for December came in below expectations at 1.00%, bringing inflation for the year below the government target to 12.32%. The peso strengthened Friday, as did other Latin currencies and most assets. A strong U.S. employment report was not enough to further depress the U.S. Treasuries, and equity markets rebounded from heavy losses suffered earlier in the week. Clearly, the U.S. equity market drove sentiment in Latin debt for the first week of the year. Soon, however, the market will focus on local fundamentals and what is likely to be a heavy new issuance calendar. Argentina's new government must continue to convince investors that they can rein in the country's troublesome fiscal deficit. Brazil's existing government needs to renew efforts at social security and administrative reforms. Venezuela will remain an oil play, but downside will be viewed as significant while uncertainty surrounds President Chavez' regime.

This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.
 

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