Emerging debt prices rose slightly on Friday after weak US durable goods data sent Treasury yields down, with low volume heralding the beginning of a customary summer trading lull. "Today in general you had a little recovery in the market," said Enrique Alvarez, Latin America debt strategist at IDEAGlobal.
Total returns rose 0.13 percent on the J.P. Morgan Emerging Markets Bond Index Plus while spreads on the index over comparable US Treasuries widened by two basis points.
Brazil's global 40 bond, seen as a benchmark for the emerging bond universe as a whole, ticked up 0.625 to bid 119.313.
Treasuries prices rose on Friday after new orders for US-made durable goods, except for civilian aircraft and defence, showed unexpected weakness last month, casting doubt on the economy's health despite continued strength in new home sales.
Emerging market bonds thrive when yields on safehaven US Treasuries yields fall because investors are forced to turn to riskier credits in search of yield.
Analysts said the main news of the day was the decision by Mexico's central bank to ease off its 16-month effort to tackle inflation by ending a policy of pushing interest rates higher in tandem with the US Federal Reserve.
At its twice-monthly announcement, the central bank held monetary policy steady and, in a closely watched statement, dropped past wording that had called for Mexican rates to at least follow their US counterparts upward.
"It seems to be that the sort of summer-type trading environment started to take over the market where you see reduced liquidity," Alvarez added, summing up the quiet day.
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