Executive Summary: Global markets were anchored by the FOMC’s decision to cut rates by 25bps. While the rate cut supported Treasuries, US equities were mixed due to AI-sector volatility (Broadcom, Oracle). Regional divergence was a key theme: EM ex-Asia credit remained resilient with tightening spreads, while Asia markets saw mixed equity performance but stable credit.
Market Visualizer
Regional Credit Developments
🌍 EM Ex-Asia Credit
- Ukraine (UKRAIN): Strong rally (+1.0-2.0pts) on headlines of US-Ukraine security guarantee discussions. GDP Warrants also rallied (+1.5pts) on amended terms and deadline extension.
- Argentina (ARGENT): Firm amid volatility. The government successfully issued $1.4bn notional in local bonds (ARGBON) at 6.5%. Nov inflation: +2.5% MoM.
- Brazil (BRAZIL): 2026 election polling shows Lula leading (38%), with Michelle Bolsonaro (23%) outperforming other opposition figures like Tarcísio de Freitas.
- Venezuela (VENZ/PDVSA): Rallied (+0.75/+1.25pts) on expectations of US operations following the seizure of a sanctioned tanker and rhetoric from President Trump.
- Gran Tierra Energy (GTE): Bonds dropped sharply (-2.75pts) after Moody’s placed the credit on review for downgrade due to weaker production growth.
- Ecobank Nigeria: Successfully accepted $71m for its tender offer on 2026 notes.
🇨🇳 Asia Credit: China Property & HY
- Vanke (VNKRLE): Standout performer; USD bonds +2pts, Equity +13% on new proposals to onshore bondholders including potential SOE credit enhancement.
- New World Dev (NWDEVL): Sentiment improved after family sold 100% stake in Alinta Energy to Sembcorp (EV A$6.5bn), sparking hopes of cash injection.
- Dalwan: Proposed extending Feb 2026 notes to 2028; market reacted positively (+1-2pts) due to consent fee and mandatory partial redemptions.
- Lai Sun: 2026 bonds up +5-6pts after selling 50% stake in CCB Tower to JD.com for HK$3.5bn.
🌏 Asia Credit: Frontier & Sovereign
- Sri Lanka (SRILAN): Stabilized (+0.125/+0.25pts) after initial weakness; IMF review delayed as government focuses on emergency flood relief.
- Pakistan (PKSTAN): Stable/Firm after obtaining IMF loan installments.
- Thailand: Corporate spreads remained in demand despite geopolitical tensions (air strikes on Cambodian military sites).
- Genting: Downgraded by Moody’s to Baa3 (Stable); bonds remained resilient (+0.25pt).
- Vedanta (VEDLN): Curve traded up +0.5pts, supported by rally in Hindustan Zinc equities (+4.2%) and silver prices.
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