Weekly Updates

Executive Summary: EM credit delivered a broadly resilient performance with risk recovering into week-end following a US–Iran agreement that eased oil and geopolitical concerns, though hawkish Fed signals capped upside. LatAm sovereigns tightened while selective CEEMEA and Africa names outperformed, with Ukraine and Bolivia standing out on catalysts. Asia lagged amid weak China macro and supply concerns, while frontier sovereigns benefited from lower oil prices. Primary markets remained open but subdued, with flows and positioning continuing to drive dispersion across credits.

Market Visualizer

Weekly Snapshot: Key Drivers & Regional Flows

Regional Credit Developments

🌍 EM Ex-Asia Credit

• Global EM ex-Asia: Credit was mixed but resilient as risk recovered late WoW on easing geopolitics, though higher UST yields and hawkish Fed tone limited gains.
• Egypt / Turkey: Egypt 2033s/2050s rose +1.125pts/+2.0pts while Turkey 2036s/2047s gained +0.625pts/+0.75pts on lighter positioning and lower oil.
• MENA IG / CEE: MENA IG was mixed with selling in oil-linked curves; CEE choppy on Romania headlines, though Hungary supported ahead of expected 25bp cut.
• LatAm Sovereigns: Broad tightening with Argentina 2035s +0.25pts (‑7bp), Brazil 2035s +0.75pts (‑11bp), Colombia 2036s +1.125pts (‑11bp), DR 2035s +0.625pts (‑8bp).
• Brazil Flows: Local risk weak with Ibovespa -4% and Petrobras -10%, alongside largest equity fund outflows in 15 weeks; credit focus on Braskem and Raízen.
• Primary Market: Issuance remained open but light at ~USD 7bn, including Banorte, Southern Copper, Volcan, OTP and PKO.
• Africa E&Ps: Kosmos upgraded to Caa2 (Positive) but bonds fell -3.0pts to -1.0pts; Tullow and Gran Tierra also down -2.0pts to -1.25pts on lower oil.
• Kenya / Ghana: Kenya passed KES 18.2bn mini-budget with supportive secondary demand; Ghana secured USD 300m World Bank financing.
• Lebanon: Bonds down ~-1.0pts amid ongoing regional tensions, with IMF reform clarification deadline set for 25 June and ceasefire renewed late Friday.
• Ukraine: Strong performance with A bonds +1.125pts to +2.0pts and B bonds +1.875pts to +4.0pts on IMF SLA and USD 4bn pledged military aid.
• Argentina / Bolivia: Argentina +0.125pts to +0.25pts on USD 2bn WB guarantee and USD 2bn trade surplus; Bolivia +1.125pts to +4.375pts on IMF program progress.
• Colombia: 2036s and 2054s gained +1.125pts/+1.50pts into run-off vote, with spreads -11bp/-4bp and improving polling momentum.
• LatAm HY: Digicel upgraded to B1 (+0.50pts), CSN +1.0pts to +4.0pts on asset sale process, while Braskem fell -5.50pts to -3.0pts on restructuring concerns.

🇨🇳 Asia Credit: China Property & HY

• China Macro: Weak May data with soft retail and housing sales drove underperformance in Chinese risk assets versus global equities.
• Genting: Perpetuals fell ~-0.5pts following withdrawal of SGD deal, raising supply overhang for USD perpetuals.

🌏 Asia Credit: Frontier & Sovereign

• Global Macro: Brent fell -7.8% on US–Iran agreement while hawkish Fed drove UST flattening, tempering late-week risk-on sentiment.
• Pakistan / Sri Lanka: Long-end bonds rallied ~+2pts supported by lower oil prices.
• Indonesia Sovereign: Stabilisation after BI hiked rates by 25bp, extending tightening cycle.
• Garuda Indonesia: 2031 bonds outperformed, rising ~+3pts WoW.
• Woodside: Curve tightened ~5bp on M&A speculation before being denied.
• Laisun: Bonds rose ~+2pts into low 90s following exchange offer launch with terms broadly as expected.

DISCLAIMER

This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.