Emerging market debt spreads narrowed slightly in thin trade on Friday following a rise in the yield of benchmark 10-year US Treasury notes. Overall the J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) narrowed 3 basis points to 355 points over Treasuries, with total returns up 0.03 percent. The 10-year Treasury note was down 5/32 in price to yield 4.09 percent, up from 4.06 percent on Thursday.
"It's a situation where the long end of the credit curve tends to be better supported on the back of the Treasury flattening, that we have seen in the last two to three days," said Rashique Rahman, head of global emerging markets debt strategy at HSBC Securities. "Absent that, there has been no major movement."
Meanwhile, creditors holding 37.3 percent of Argentina's defaulted debt had signed up for its mammoth debt swap as of Wednesday, 3-1/2 weeks into the offer. But the Global Committee of Argentine Bondholders (GCAB), which says it represents around $40 billion in eligible debt, has launched a counter-offensive to convince investors to hold out and fight for a better deal in court.
GCAB co-head Hans Humes said late on Thursday Argentina's offer may violate bilateral trade agreements and warned the group may launch an international challenge based on those pacts.
Brazil's global bond due 2040, considered the emerging market's benchmark, was up 0.500 in bid price to 118.125, yielding 8.372.
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