Cbonds Weekly Report 25-11-2024

Last week, global bond markets were moderately positive. US yield curve values rose for the short durations, especially 1Y and 2Y, and stayed flat for the longer ones. In terms of Cbonds USD price indices, Latin America has proved itself as the best performer during the last 4 weeks, both in corporate and sovereign segments. Cbonds EM Corporate YTM Index decreased by 2 bp.

In emerging markets, Adani Group occupied the center stage. Bonds of various Adani Group entities tumbled after the company faced the bribery charges by the court in the US. On the price gainer\'s side, investors recalibrated their sentiment towards bonds of Pemex. As a result, the losses of the preceding week were partly reversed. Certain Chinese real estate developers suffered significant losses due to their slow progress in the reduction of the debt burden and improvement of their financial health.

In developed markets, the previous week\'s price movement did not follow any particular country or industry pattern. Bonds of Target, a US FMCG company, dropped in price as the company posted poor earnings results for Q3 2024. YTM for the Italian F-Brasile bond headed up by 0.5 pp despite the mild decline in price by less than 1%, the reason being the short duration of the instrument.

The bond market discussions last week were not soothing for Europe. The latest Financial Stability Review by the ECB drew attention to the growing debt and debt service burden of European governments. News articles note that the recent round of geopolitical escalation around Ukraine as well as poor economic activity data in the Eurozone draw credit spreads wider and make investors flock into safer assets such as German sovereign papers and US treasuries.