Bonds Mostly Higher Alongside UST's

Coronavirus concerns in the region exert effects on bond markets, while a move higher in UST's is supportive.

• INDIA: Bonds supported as INR and stocks decline, the number of coronavirus cases continues to surge, India now holds the dubious honour of reporting the highest tally of daily cases. Meanwhile New Delhi and Mumbai impose lockdowns, even as PM Modi issues plea to states to only use enact lockdowns as a last resort. Markets will await the release of the minutes from the April meeting, the main point of the meeting was the announcement of the GSAP programme, participants will parse the minutes for signs that there is still dry powder after the first round of the programme was largely ineffective.
• SOUTH KOREA: Futures higher, South Korea reported 735 new virus cases for the second straight day on Thursday amid lingering woes over another wave of the pandemic as the country's vaccination campaign gathers pace, with vaccinations set to top 2 million. Elsewhere, while foreign inflows into South Korean bonds continue the pace has slowed as the week has progressed. Yesterday saw inflows of $106.72m, down around $189m form the day before and some $350bn lower than Monday.
• CHINA: Bond futures are lower, 10-year future reversing all of yesterday's gains and extending past Tuesday's low. There are reports that China is considering a plan that would see the PBOC take on CNY 100bn of assets from China Huarong Asset Management in order to help the state-owned company clean up its balance sheet and refocus on managing distressed debt. If this did transpire it would be a clear signal of government support for firms under distress. While there is speculation China could respond to Australia after scrapping of an agreement for the state of Victoria to cooperate under the Belt and Road Initiative.
• INDONESIA: Bonds higher, the 10-year yield drops to the lowest level since mid-February. The government sold IDR 2.64tn of bonds via a greenshoe option yesterday, receiving IDR 3.41tn of bids. With little of note on the local data docket, focus turns to a press briefing with FinMin Indrawati, who will provide an update on 2021 state budget at 0700BST/1400HKT.