Brekkie Bond Wrap
We had a quiet end to the week as many major markets were closed for the May Day holiday. The tone on Thursday was dictated for the most part by Treasury price action with better buying across the IG space with lower cash prices. IG China oil names like the new CNOOC and Sinopec were well bid as were internet names like BABA and TENCENT which were a couple of bps tighter. Similarly the Petronas complex did see good demand though that did fade away.
HY bonds were mixed though the tone across China property names did feel constructive as their stocks rose strongly. The likes of Evergrande (+18.93%), Country Garden (+7.14%), Hopson (+12.87%), Greentown China (+8.19%), Agile (+9.43%) and KWG (+6.35%) all rallied nicely on the day. Bloomberg carried an article saying that Sunac has sought permission to proceed with the Kaisa stake acquisition without updated audited results which apparently is required by the HKSE. The Kaisa curve rallied by about five points as a result. Indian corps were mixed while Indian names like Vedanta remained firm although sellers are beginning to emerge after the recent strong run.
The key data point for this week will be the April Non-farm Payrolls number on Friday (Exp: +225K). Will we see a strong rebound from March’s weak number to put a Fed tightening firmly back on the table again? Strap yourselves for what will likely be a volatile week ahead.