- Taking advantage of the quick change in sentiment towards emerging markets in general and Brazil in particular, the Brazilian government today issued $3.2B in bond dues 2025. The paper was priced to yield 4.305%. About one billion of the total will be fresh cash for the government, the rest will pay off existing debt.
- With developed market interest rates on the rise this summer, few had interest in emerging market debt, but the last several weeks have seen the taper delayed, the nomination of Janet Yellen to lead the Fed, and a sharp drop in interest rates. With U.S. rates looking like they're staying lower for longer, emerging market yields - no matter the risk (Brazil's credit rating outlook was lowered from positive to stable by Moody's this month) - become more enticing.
- Also helping is a Brazilian central bank refocusing on inflation - it hiked its benchmark rate to 9.5% this month and gave every indication 10% is coming in November.
- Brazil ETFs: EWZ, BRF, EWZS, BRAF, BRXX, UBR, BZQ, BRAZ, BRAQ, BRZS, BRZU, BZF.