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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (8325)	2/19/2004 8:36:26 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

Reuters Emerging debt-Brazil bonds follow stocks down Thursday February 19, 11:03 am ET NEW YORK, Feb 19 (Reuters) - Brazilian sovereign bond prices fell Thursday in tandem with the country's stock market, which slipped as much as 3 percent, amid fears a corruption scandal may slow progress toward passing economic reforms. Brazilian total returns fell 1.04 percent according to the JP Morgan Emerging Markets Bond Index Plus (EMBI+) (11EMJ), dragging the wider index down 0.51 percent. "This Brazil scandal is what's driving the market down," said a trader. The scandal stems from accusations that a government aide close to President Luiz Inacio Lula da Silva's powerful chief of staff, Jose Dirceu, collected funds in exchange for political favors. Brazilian total returns fell 2.36 percent on Wednesday after the government said it will form a presidential commission to investigate the actions of the official. The country's bonds have underperformed the wider emerging debt market so far this year after a stunning rise in 2003. Brazil accounts for about a quarter of the EMBI+ and heavily influences the market's direction. Brazil spreads widened 12 basis points to 568 on Thursday, reflecting the perception of increased risk as measured against safe-haven U.S. government securities. The Sao Paulo Stock Exchange's benchmark Bovespa (Sao Paolo:^BVSP - News) was down 2.63 percent in early afternoon trading on Thursday.