Bonds Supported After Break

Bonds mostly bid on the return after market holidays, mixed equity market performance and a pullback in US futures helped support the space.

• INDIA: Yields lower across the curve amid a second wave in coronavirus cases that have resulted in a lockdown in Mumbai the surrounding area. Markets await the RBI rate announcement tomorrow, the bank is expected to keep rates on hold but could address its plans to support the bond market amid worries over the markets ability to digest supply. Elsewhere the RBI has increased the additional subscription amount at Friday's auctions, a tool to help lower funding costs.
• CHINA: The PBOC matched maturities with injections again today, the twenty first straight session of matching maturities, while the bank hasn't injected funds since February 25. Repo rates are mixed, overnight repo rate up around 4.4bps at 1.7644% while the 7-day repo rate is down 8bps at 1.9191%. Bond futures are lower, despite poor performance for equity markets, declines from Friday seen accelerating. 10-year future hits the lowest since March 23. Data earlier in the session showed Caixin Services PMI rose to 54.3 in March from 52.1 previously, this denotes the highest reading since December 2020 and the eleventh consecutive month of expansion.
• SOUTH KOREA: Futures are higher in South Korea, bid as equity markets struggle to make it out of negative territory.10-year futures have been on a path higher after bottoming out around 125.50 mid-session yesterday. Yesterday's auction was well received but the amount sold was above the announcement which pressured bonds.
• INDONESIA: Yields lower, curve steepens. Markets look ahead to an IDR 10tn bond sale after a disappointing run of auctions, while a speech from Fin Min Indrawati on "Economic Policy in Dealing with COVID-19 Pandemic and Proper Exit Policy" is also in focus.