Benchmark returns fell after stock market sell-off

Benchmark yields fell after a sell-off in the stock market and a weaker-than-expected US CPI (+ 2.3% vs. + 2.4% expected), UST10Y – 3.16% (-5bp).

EM bonds showed mixed performance. Brazilian assets were recovering amid the latest polls, Brazil 10Y – 5.52% (-10bp). Saudi bonds and bonds of other countries in the MENA region fell in price amid US threats to impose sanctions on Saudi Arabia, KSA 10Y – 4.37% (+10 bp).

The Turkish lira strengthened during the day after the release of strong macroeconomic statistics – the current account in August was in surplus ($ 2.6 billion versus – $ 1.75 billion a month earlier). Turkish bonds also rose in price, Turkey 10Y – 7.92% (-10bp). Lira was backed late in the evening by news that, according to several US government sources, Pastor Brunson could be released in a few days. Lira closed the day at 5.92, + 2.6%.

Russian bonds fell following the decline in oil prices, spreads on sovereign issues widened by 4-7bp. OFZ also fell in price: 26207 – 8.88% (+4 bp).

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