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CREDIT UPDATE: China Property Bonds Surge, Asia IG Spreads Widen

CREDIT UPDATE
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  • Asian equity markets are mixed today following Iran’s missile strikes on Israel, as investors remained cautious about the potential fallout from escalating Middle East tensions. Japan led the declines with the Nikkei falling 1.9%, while markets in South Korea, Malaysia, Thailand, and Indonesia posted smaller losses. Hong Kong's HSI bucked the trend with a 6.30% surge, driven by optimism over China’s aggressive economic stimulus measures, particularly the easing of home-buying restrictions. The USD gained on geopolitical concerns, while gold, bonds, and oil saw stronger reactions, with WTI crude rising 1.6%.
  • Another slows session in APAC credit markets and is expected for the remainder of the week with China out. Goodman group has launched its 10y USD bond at +170bps area, which is expected to price during the US session tonight. The recently issued ANZ At1 is now trading 45bps tighter than issue at +250bps, while similar tenor ANZ T2s have only seen a 5bps tightening over the same period, while ANZ snr bank paper is trading flat. Non-bank T2 paper still remains well bid with SCGAU trading -24/-28bps, QBEAU -5/-10bps with the fixed rate lines outperforming.
  • With China out trading had been subdued, spreads on Asia IG widened 2-4bps following Iran's attack on Israel which weighed on investor sentiment. Asian names have been in the overnight session with an obvious focus on China property bonds with many names trading up anywhere from 10-35pts over the past few sessions and expect the trend to continue after the BBG China Property Gauge with surged another 30% today, and now trades up 140% from the September lows.
  • Aus iTraxx CDS is +2bps 65.5bps & while Asia Ex-J iTraxx +1.5 at 70bps
  • Headlines: RBA Faces Questions Over Off-the-Record Briefings With Banks
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  • Asian equity markets are mixed today following Iran’s missile strikes on Israel, as investors remained cautious about the potential fallout from escalating Middle East tensions. Japan led the declines with the Nikkei falling 1.9%, while markets in South Korea, Malaysia, Thailand, and Indonesia posted smaller losses. Hong Kong's HSI bucked the trend with a 6.30% surge, driven by optimism over China’s aggressive economic stimulus measures, particularly the easing of home-buying restrictions. The USD gained on geopolitical concerns, while gold, bonds, and oil saw stronger reactions, with WTI crude rising 1.6%.
  • Another slows session in APAC credit markets and is expected for the remainder of the week with China out. Goodman group has launched its 10y USD bond at +170bps area, which is expected to price during the US session tonight. The recently issued ANZ At1 is now trading 45bps tighter than issue at +250bps, while similar tenor ANZ T2s have only seen a 5bps tightening over the same period, while ANZ snr bank paper is trading flat. Non-bank T2 paper still remains well bid with SCGAU trading -24/-28bps, QBEAU -5/-10bps with the fixed rate lines outperforming.
  • With China out trading had been subdued, spreads on Asia IG widened 2-4bps following Iran's attack on Israel which weighed on investor sentiment. Asian names have been in the overnight session with an obvious focus on China property bonds with many names trading up anywhere from 10-35pts over the past few sessions and expect the trend to continue after the BBG China Property Gauge with surged another 30% today, and now trades up 140% from the September lows.
  • Aus iTraxx CDS is +2bps 65.5bps & while Asia Ex-J iTraxx +1.5 at 70bps
  • Headlines: RBA Faces Questions Over Off-the-Record Briefings With Banks