Bonds Bid As Coronavirus Worries Linger

Bond markets supported in cautious trade with a risk off tone evident from the start.

• INDIA: Markets closed for a local holiday.
• SOUTH KOREA: Futures higher in South Korea as stocks in Asia retreat, additional coronavirus concerns as cases rise above 700 again outweigh positive data. Some corporate issuance announced. LG Electronics announced plans to sell KRW 300bn of bonds in 5-,7-,10- & 15-year maturities, the size could rise to KRW 600bn. The 5- & 7-year note could feature ESG criteria.
• CHINA: The PBOC matched maturities with injections, the thirty second straight session, the last time the bank injected funds into the financial system was Feb 25. Repo rates are higher, the overnight repo rate up 16bps at 1.8626% but down from 2.11% yesterday, the 7-day repo rate is 4.5bps lower at 2.1145%, below prevailing repo rate after dropping from above the level yesterday. Bond futures are higher, but off highs seen near the open. The general tone in the region is risk off with bonds supported and equity markets looking heavy.
• INDONESIA: Curve bear flattens. Bank Indonesia left its monetary policy settings unchanged Tuesday, in line with expectations, but trimmed its GDP forecast for 2021 to +4.1%-5.1% from +4.3%-5.3%. Unsurprisingly, BI continued to stress the need of maintaining rupiah stability amid persistent uncertainties. Elsewhere, a sukuk sale yesterday missed the government's target, IDR 7.37tn were sold against a target of IDR 10tn.