30-Year Auction Awaited

The PBOC matched maturities with injections today, repo rates have declined; overnight repo rate down 1bp at 1.7893%, the seven-day repo rate is down 6.15bps at 1.9962%.

• Futures are higher in early trade, 10-year up 15.5 ticks at 98.375, a contract high, building on yesterday's gains. US tsy futures gained on Thursday.
• China plans to sell CNY 20bn of 30-year upsized bonds today, the previous 30-year auction on April 9 drew a yield of 3.72% with a bid/cover ratio of 3.08. The marginal cover at the high yield was 1.39. Results are due after 0335BST/1035HKT. Bloomberg has reported that China has sold $326.5bn worth of bonds this year, up 65% on the same period last year.
• Elsewhere corporate bond spreads have tightened after Huarong asserted its preparedness for upcoming bond repayments and said support from the Chinese government remains in place. The comments are intended to assuage concerns after media reports that regulators were concerned over the restructuring plan.