Bonds Sell Off Globally

Bond yields mostly higher on global inflation fears, China bucks the trend on inclusion in the WGBI index.

• INDIA: Yields higher across the curve, following the trend of bonds globally, while higher equity markets in India have accelerated the sell off. Downside is tempered by the announcement from FTSE Russel that India will be placed on the watch list for potential reclassification of its market accessibility level, and will be considered for inclusion in the FTSE Emerging Markets Government Bond Index.
• INDONESIA: Yields higher across the curve, some steepening seen, 2-/30-year spread 3.3bps wider. Markets await the results of an IDR 30tn target auction. The market is wary of supply risks when it comes to Indonesian bonds, the government have been reliant on the greenshoe option to fill requirements at desired yields.
• CHINA: The PBOC matched maturities with injections again today, the seventeenth straight day of matching maturities, while the bank hasn't injected funds since February 25. The market appears sanguine about liquidity, the overnight repo rate is last at 1.8081%, from around ~2.00% last week while the 7-day repo rate last at 2.1897%, below the prevailing PBOC repo rate of 2.20%. Futures are higher, building on gains from yesterday after inclusion in the FTSE Russel WGBI index.
• SOUTH KOREA: Bond futures in South Korea are lower, giving back yesterday's gains. 10-Year contract last down 75 ticks at 126.25 as equity markets move higher. Cash space has seen the curve steepen, 10-year yield up 1.1bps at 1.994%, while 2-year yield falls 0.1bps to 0.919%. South Korea says Covax's AstraZeneca vaccine delivery, which was scheduled on March 31, will be delayed to the third week of April.