Brekkie Bond Wrap

Daily Credit Wrap:

Investment Grade:
IG Asian credit traded with a slightly softer tone against a weaker macro backdrop. However, we are hearing that flows are still very balanced in the IG space. The oil/SOE sector remains active, while the tech space was 1-2 bps wider led by BABA. The recent outperformer Petronas stabilized at current levels, while Indian corps and banks leaked 2-3 bps wider.

High Yield:
Chinese HY names continued to trade with a strong tone, led by the COGARD complex which is 2-3 points higher on the back of Ping An’s purchase of a 10% stake in the company. We are seeing a bit of a bounce in oil credits too as oil prices head back up towards the $50 level.

Thoughts:
Asian credits are holding up surprisingly well despite the risk-off sentiment in US markets. China is leading the way on the back of supportive policies from the Chinese government. It feels like this rally in the Chinese HY market looks set to continue, particularly if we get a market-friendly, Goldilocks-type of non-farm payroll number tomorrow tonight. Good luck!