Brazilian bond prices soared on Friday following the release of weaker-than-expected US payrolls data that calmed fears of any sudden interest rate hikes by the Federal Reserve. A surprisingly soft 112,000 new US jobs were created in November, the Labour Department said on Friday, casting a shadow across an already downbeat holiday sales season with consumers apparently worried by scarce work and high oil prices.
"It's looking good all around," said a New York-based emerging sovereign bond trader as prices rose.
Brazil's Global 40 benchmark bond rose 1.812 in price to bid 116.000 at a yield of 8.670 percent.
Total returns on Brazil's sovereign debt on the JP Morgan Emerging Markets Bond Index Plus rose 0.88 percent while Brazil country spreads narrowed by 2 basis points.
Total returns on the index as a whole rose 0.67 percent while spreads widened by 4 basis points.
An indicator of perceived country risk, EMBI+ spreads indicate yields over comparable safe-haven US Treasuries.
Total returns show how much an investor gains or loses in terms of bond prices of a particular country or across the EMBI+ board on the day.
Brazil cashed in on the rally by launching another $500 million of its 2014 global bond to high demand at an expected price of 114.75. The deal, operated by JPMorgan and Morgan Stanley will price later on Friday.
"Honestly I cannot think of a more perfect environment for the Latin American region," said Alberto Bernal, head of Latin America research for IDEAglobal. "Today's number was the perfect excuse to remain invested and actually build up a little bit of exposure."
"This whole thing will break one day and everyone will start crying," he said, referring to a seemingly unstoppable emerging market sovereign debt price rally. "But for the time being, the trend is your friend.