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China Coronavirus Cases Rise

ASIA RATES
  • INDIA: Yields higher in early trade. Bonds were supported yesterday thanks to a sharp drop in oil prices, also supporting the short end is the choice of bonds included in the RBI's next INR 250bn GSAP purchase operation on Aug 12. Bonds eligible for purchase are the 5.63% 2026, 7.17% 2028, 7.26% 2029, 7.61% 2030, 7.95% 2032. Yields fell yesterday for the first time in four sessions, the RBI maintained its dovish tone last week but extension of the VRRR programme indicates the bank is uncomfortable with large amounts of liquidity and is looking to start to normalize liquidity levels.
  • SOUTH KOREA: Futures lower at the open as markets played catch up with a move lower in US tsys, overall movement was rangebound through the session and also within Monday's range. On the coronavirus front South Korea recorded 1,540 daily new coronavirus cases on Tuesday, back to above 1,500 as the nationwide resurgence of COVID-19 cases continued amid the summer season. The MOF sold 2-Year debt to decent demand.
  • CHINA: The PBOC matched maturities with injections again today; the overnight repo rate is up 36bps at 2.2651%, 7-day repo rate is down 14 bps at 2.3565%. Futures are higher with equity markets struggling for direction. On the coronavirus front there were 143 new coronavirus cases in mainland China today, the highest case count since January 20.
  • INDONESIA: Yields are higher across the curve. Indonesia announced that it will gradually relax restrictions in several locations including Jakarta and said it's preparing a plan for living with Covid-19 over the next few years. Officials extended restrictions in Java and Bali through Aug 16 and said that Covid rules for other islands will remain in place through Aug

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