Brekkie Bond Wrap
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It was a softer day in the Asian HY markets with bonds weaker by 1/4 – 1/2 points on some profit-taking after the strong performance in the past few sessions. Kaisa however bucked the trend, finishing + 1pt as the market starts to price in a bond-friendly resolution to the whole saga. Chinese industrials were similarly weaker, with biggest drops coming from YZCOAL (-1pt) post Fitch downgrade. Oil bonds continue to be well bid on the continuing recovery in crude prices. Indian HY outperformed, with Vedanta up 1/4 point on retail buying.
The IG cash bond space was flat to a touch wider with some good 2-way flows in Petronas and Indian names like Reliance and NTPC. $ cash prices will however be higher today on the back of the rally in UST overnight, with weaker-than-expected US retail sales.
JACI IG -1.94bps to 188.9 (2015 range 183.9-214.7)
JACI IG Corp -2.89bps to 197.7 (2015 range 191-217.4)
JACI HY +0.3bps to 7.01% (2015 range 7.11%-7.89%)
JACI HY Corp unchanged at 7.17% (2015 range 7.33%-8.13%)
JACI Sovereign +0.88bps to 191.6 (2015 range 179.5-230.4)
CEMBI unchanged at 366.7 (2015 range 365.5-440.6)
EMBI Global +3.11bps to 385.3 (2015 range 381.6-454.8)
Itraxx Asia ex-Japan +1.25bps to 106 (2015 range 96.875-123)