The short-end of the Petrobras bond curve, which faced the brunt of a recent sell-off, continued to strengthen on Monday and gave a solid boost to LatAm credit markets.
The 2017s and 2019s issued by the Brazilian state-owned oil company were about 50bp tighter versus Friday, according to a New York based trader.
Today’s rally extended last week’s jump in prices following Petrobras’s decision to hike fuel prices and a reshuffling of President Dilma Rousseff’s cabinet – a move that was seen as easing the way for the passage of vital fiscal measures.
“It didn’t make sense where Petrobras was trading,” said the trader. “Real money had until September 31 to get rid of those bonds so there was some overshooting.”
Brazil Energy Insight 
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