Sovereign Bond Spreads:

 

Significant New Issuance - CSFB Commentary:

?	The first week of September was extremely positive for the region with a significant increase in secondary trading volumes and bond prices. Relative financial stabilisation in Argentina removed pressure from Latin American and other emerging markets, shifting the focus to the impact of local factors on prices in each region. It was a busy week in the Turkish market, which started initially on a weaker note because of the disappointing inflation data released on Monday, but then recovered to follow other Eastern European markets and closed around 1.5 points higher on the week. The long awaited resignation of the Minister of Public Works added to the positive sentiment in the market. The Russian market rallied this week, first on the back of Latam stabilisation and then encouraged by the Moody's rating upgrade (see below). Prices peaked on Thursday, immediately after the upgrade, but failed to stay at those levels due to profit taking and a sliding Latam market, closing only one point higher than last Friday. Central and Eastern European investment grade assets remained stable throughout the week, which is a good sign given the sell-off in US Treasuries. Other countries in this region gained around ? point, with Romania being the best performer gaining ? point.
?	On Wednesday, Moody's raised the ratings of outstanding Eurobonds of the Russian Federation to B2 from B3 and changed the outlook for all hard currency instruments to "positive" from "stable." Moody's noted that Russia's recent economic performance and tax reforms have generated twin surpluses (current account and budget) and large foreign currency reserves. In combination with some debt relief, these factors have made the country's capacity to service its debt much greater.