Emerging debt spreads are likely to trade in ranges early in the week ahead of Venezuela's bond sale results and the IMF meeting late in the week.

However, spreads will remain firm as market fundamentals continue to support trade."The fundamental themes haven't changed," said Jose Barrionuevo, director of emerging market strategy at Barclays Capital in New York.

"The Fed will continue tightening at a measured pace, interest rates remain at record lows, markets continue looking for yield and there is new money," he said.

The U.S. Federal Reserve raised interest rates by 25 basis points last week to 1.75 percent, confirming it is set to raise interest rates at a measured pace, a move welcomed by bond dealers.

Investors will be on the sidelines this week, awaiting the results on Tuesday of Venezuela's sale of 10-year global bonds for up to $1.5 billion as part of a refinancing operation.

Guatemala is also set to sell around $300 million in bonds this week.Mexico last week sold $1.5 billion in 30-year bonds, while Brazil reopened a euro-denominated bond by issuing 250 million euros of an 8-year bond, bringing the total amount sold to 1 billion euros.

Despite a flood in bond supply, investors continue to search for yield in emerging markets since U.S. rates are relatively low, analysts say.

Ahead of the Oct. 1-3 International Monetary Fund meeting, investors in Ecuadorean bonds will want to hear what Enrique Garcia, executive president of the Andean Development Corporation, will say on Tuesday when he speaks to Wall Street on the challenges ahead for Latin America.

Ecuador hopes to win approval for an estimated $500 million multilateral aid package by December to ensure adequate budget financing for 2005.

Ecuador will receive $200 million from the World Bank, $200 million from the Inter-American Development Bank and around $100 million from the Andean Development Corporation.

On Wednesday, Colombian President Alvaro Uribe, as well as the finance, defense, commerce and energy ministers, will talk to investors in New York.

Uribe, popular for his single-minded policy of increasing security in order to allow economic growth, is trying to get the constitution changed to allow him to run for an unprecedented second term.

Wall Street wants to see long-term reform of the country's bankrupt pension system and a reduction in the rate at which the government must transfer money to municipal governments.

(From Reuters, September 27, 2004)

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