Attention in the eurobond market was more focused on non-trading activities, as expectations of a new sovereign issue mounted. Market talk suggests a bond of 3 to 5 years maturity totaling between $300 million - $500 million. As it happens, the limited trading activity in the market was concentrated in the 3-5 year maturity range, as investors perhaps start to position themselves ahead of the expected new issue.
Those investors will be mainly local banks, with foreign investor appetite for emerging market bonds not being that healthy at present.
Lead managers for the new bond are expected to be mandated next week, with Credit Suisse First Boston, Morgan Stanley Dean Witter, Salomon Smith Barney, Merrill Lynch and Deutsche Bank reportedly among the candidates.
As the rest of the U.S. watched developments in the presidential election pensively, U.S. Treasuries chalked-up gains as the uncertainty impacted negatively on stocks and investors preferred to switch to the traditional safe-haven of government securities. Short-term Treasuries were the major beneficiaries of this sentiment, but longer-dated bonds had risen on another $1.25 billion Treasury buy-back of 30-year paper.
On the economic front, the major data release was the PPI, which saw a 0.1 percent decline in the core figure in October against an expected 0.1 percent rise, indicating a continuing benign inflation outlook. — ( Banque du Liban et d'Outre-Mer Sal )
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