Emerging market sovereign bond prices rose on Friday, recouping some of the week's losses, following a rise in US Treasuries sparked by weaker-than-expected US growth data.
Total returns on the J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) rose 0.53 percent as spreads widened by a single basis point. "The main driver is US markets," said Siobhan Manning, Latin American debt strategist at Italian investment bank Caboto. "The weaker-than-expected second quarter GDP data which sparked the rally in Treasuries ... spilled over to emerging markets."
US second-quarter preliminary gross domestic product expanded at a slower pace of 3.0 percent largely due to weaker consumer spending, after an upwardly revised 4.5 percent clip at the start of the year. Economists had forecast growth of 3.6 percent.
Brazil's global bonds due in 2040, an emerging market benchmark, bid as high as 98.813, though they later settled lower. Ecuador, one of the region's most volatile credits, rallied 1.83 percent in total returns, supported by rising prices of crude oil, the country's biggest export. Ecuador's country spread narrowed 16 basis points to 853 over comparable US Treasuries.