Enrique Alvarez Quotations

Next week is characterized by very low liquidity in Brazilian financial markets, and no major economic data are released.

It is going to be a Fed week. The market is 100 percent in sync with a quarter of a percentage point rise for Fed fund rates at 4.75 percent.

It is pretty evident that every time you get above (the 10-year Treasury yield of) 4.72 to 4.73 percent area the market becomes uneasy. That is the inflection point where you see negative returns and some spread widening (in emerging market debt).

Latin America is finishing the year on a very strong tone.

People are starting to become weary of the inversion in the U.S. curve and in particular the yields that you receive in the 6-month and 2-year notes.

Overall, you have a very technical market pushing us to historical highs because once people got a feel for these higher levels, it has been an easy push to the upside and has been helped by lack of liquidity.

Treasuries seem to be overly happy and emerging markets seem to be quite content also.

There are other social factors in Bolivia that are pressing (Morales) to take more rapid action. The relationship that he is building with Chavez and Castro is also forcing him to act with more speed.

Both countries are convinced they're going to meet their future financing needs on the domestic markets.

Emerging markets are very dependent on the direction of the Treasury. The market has had very good success in not invading above the (10-year Treasury) 4.80 percent yield level which is a very difficult area for the U.S. Treasury market.

You don't see major these kinds of fluctuations unless there's major maintenance going on, which is usually announced in the press.

The necessities are anything that could eliminate going to Tucson.

In general it's a healthy profit taking move for the EM market, and for the domestic markets in Latin America as the stock and currency markets are coming off.

In Argentina in particular you have seen a pickup in volatility over the last couple of months, and it has to do with the fact that it has higher yields available and longer duration and makes it prone to volatility.

The market place is at the mercy of the Fed, its rhetoric and of U.S. Treasuries, which are highly data dependent. Anything that signals weakness either in inflation or in housing will be positive for Latin America because it is going to weaken Treasury yields.

The Latin American market is going to pay a lot of attention to moves in U.S. Treasury rates, while the US equity market remains a major momentum generator.