Amadeusz Juskowiak

Currency sectors continue to feature eurobond trade

Early dollar straight eurobond trade was quiet with currency sectors particularly eurosterling continuing to perform strongly closely reflecting current trading patterns on the foreign exchanges dealers said

Eurosterling bonds continued to rise steadily bolstered by the extremely ebullient tone of the UK Government bond market on a combination of positive UK Economic fundamentals

The dollar was initially stabler but most dollar straight bonds were static in dull trade A handful of issues showed signs of weakness but dealers said investors were awaiting todays release of US Leading indicators for January

The US Data due out this afternoon is expected to be weak placing the US Unit under renewed pressure and robbing the market in dollardenominated eurobonds of fresh trading impetus one dollar straight trader said

Its going to be another tedious day and I cant see how anybody is going to make any money he said

Eurosterling issues continued to rally on the back of general sterling euphoria with the UK Currency trading at six month highs on interest rate optimism and the strength of the domestic equity markets

Eurosterling bonds saw early gains of up to half a point

However some eurosterling dealers noted the bonds could soon fall back marginally if as expected professionals stepped in to take profits at current healthy levels

Trade in markdenominated bonds was expected to be subdued today due to preLenten carnival festivities in West Germany

There were signs of reawakened investor nerves affecting trade in the floating rate note market which yesterday started the week extremely quietly after a hectic selloff last week

FRN dealers said paper of US and also of Canadian banks was seeing some pressure as a result of recent press reports focussing on their exposure to Latin American debt

Brazilian Finance Minister Dilson Funaros visit to Europe has also brought the spotlight back onto the debt crisis after things had more or less quietened down following the first shock statements last week one FRN specialist said

Despite the dearth of activity in the dollar straight secondary market two new dollar issues were the only early features on the primary market

These were a five year 150 mln dlr deal launched by Morgan Guaranty Ltd for Saab Scania at 734 pct priced at 10134 pct

The other issue was a 100 mln dlr deal also due 1992 for NV Nederlandse Gasunie paying 714 pct and priced at 10118 pct with Citicorp Investment Bank Ltd as lead manager

Dealers predicted reasonable demand for both issues due mainly to a lack of fresh good name paper in the market

REUTER