China Futures Hit Contract High

China futures hit a fresh contract high after strong auctions, while Indian bonds benefitted from the decline in crude.

• INDIA: Yields are lower in early trade after rising slightly yesterday. Oil lost ground yesterday which should ease some concerns over inflation overshoots for India as net importers. India reported a record number of coronavirus deaths in the past 24 hours, though case numbers have declined from their peak. The government now sees COVID-19 positivity rate falling to 2% by the end of May. Markets look ahead to a bill sale later today, as well as the latest GSAP operation tomorrow.
• CHINA: The PBOC matched injections with maturities today, repo rates are higher but significantly lower than highs seen this week. The overnight repo rate up 3.2bps at 2.022%, this week's high at 2.20%, while the seven day repo rate is at 2.11% from highs of 2.25% earlier this week. Futures climbed from the open, playing catch up with some gains in UST's, while Chinese equity markets are also lower. The 10-year future hit a fresh contract high. 2-year and 5-year auctions were strong which put a fresh bid in futures. Markets look ahead to LPR announcement tomorrow.
• INDONESIA: Yields are higher again as the sell-off continues. The Indonesian DMO said in a report that the government will maximise bond issuance for the remainder of the year in order to address capital outflows, as well as use the Bank Indonesia's support as standby buyer at auctions.