HALISTER1: EM Exposed to Swing in Treasuries; Brazil Bonds Favored: Nomura

EM Exposed to Swing in Treasuries; Brazil Bonds Favored: Nomura

(Bloomberg) -- Emerging markets are “clearly vulnerable” to a reversal of UST weakness after last week’s spread tightening, Nomura analyst Siobhan Morden writes in note.
  • Expects commodity credits and high-yielders to outperform, although they lack positive credit momentum
  • Brazil still “everyone’s favorite credit” given large economy, positive fiscal reform momentum and proactive central bank
  • Favors Argentina’s new 5Y given defensive characteristics and spread premium
  • Says PDVSA ’20 is “favorite bond” in Venezuela
  • Uruguay is cheapest IG credit with least U.S. policy risk
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Siobhan Morden (Nomura Holdings Inc)

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