Emerging debt-Asian spreads narrow, but Vietnam stays wider

HONG KONG, May 5 (Reuters) - Asian bond spreads narrowed on Monday after less-dire-than-expected U.S. jobs data eased concerns about the region's top export market, but trading was subdued due to holidays in Tokyo and London.

Vietnam's sovereign debt bucked the trend, remained weak after Standard and Poor's Ratings Services (S&P) lowered its outlook on the country to negative from stable on Friday, putting at risk the current "BB" foreign debt rating.

The Southeast Asian country's five-year default swaps (CDS), or insurance-like contracts that protect against defaults or restructuring, traded at 220 basis points (bps), according to a trader, in line with Friday's levels.

But that was about 40 basis points wider than Philippines' CDS, which was quoted at around 185/190 bps. S&P rates Manila's foreign debt at a comparable BB- rating.

"The market's been negative on Vietnam for quite a while now. The CDS has moved out quite a bit since last month. It used to be 40 (bps) tighter than Philippines and now is trading 40 wider," said a Hong Kong-based trader.

However, the broader market continued to strengthen following data on Friday showing the U.S. economy lost 20,000 jobs in April, the fourth consecutive month of reduced employment but far fewer than the 80,000 that economists had anticipated. [ID:nN02551119]

Investors were also comforted after the U.S. Federal Reserve on Friday joined the European Central Bank and the Swiss National Bank in expanding programmes to spread more cash through the banking system to restore confidence in credit markets. [ID:nL02844155]

But trading was quieter than usual due to holidays in major financial centres, said a Hong Kong-based trader.

The iTRAXX Asia ex-Japan high-yield index <ITAHY5UA=ITX>, a key measure of risk aversion, narrowed by around 10 basis points to 420/428, according to the trader.