Bonds In The Region Supported

Bonds generally higher, bid on broad risk aversion across the region. China bucks the trend.

• INDIA: Bonds higher, extending Friday's move, markets look ahead to today's conversion offer from the RBI. The RBI cancelled the 10-year auction on Friday, rejecting all bids for the paper and effectively drawing a line in the sand for yields. Following the auction yields fell to 6.09% from 6.17% pre-auction, most likely on reduced supply to the market. Still a sense of caution as virus cases continue to surge while risk off takes equity markets into losses for the year.
• SOUTH KOREA: Futures in South Korea higher, moving higher along with the general defensive tone in the region while a strong 10-year pre-issue auction helped support the sector. 10-year futures up 36 ticks at 126.90, while 3-year futures up 6 ticks at 110.86. Curve bull flattens, 10-year yield down 3.3bps at 2.005%, while 2-/30-year spread is 1bps tighter.
• CHINA: Futures are flat in China, shrugging off the broader defensive tone in the region. 10-Year at 97.765. In corporate bonds most China Huarong dollar bonds rose on Monday, building on the gains Friday following comments from China's financial regulator saying the bad-debt manager was operating normally and had ample liquidity. Repo rates rise as the PBOC refrains from injections for the thirtieth straight session.
• INDONESIA: Yields are lower across the curve in Indonesia, markets treading water ahead of the BI later this week. The Business Times circulated an interview with FinMin Indrawati, who said that Indonesia's GDP growth can return to pre-pandemic levels as more people become inoculated against Covid-19. She said that the gov't remains optimistic and expects a 4.5-5.3% Y/Y growth this year.