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Mixed performance as economic divergence becomes more pronounced.

  • INDIA: Bonds gained on Friday after auctions saw sales of INR 220bn against a planned INR 320bn, the move provided some supply respite amid a weak appetite for debt, the move is extending so far today. Markets will also assess the worsening coronavirus situation. Chief Minister Arvind Kejriwal on Sunday announced extension of the ongoing lockdown in Delhi for another week, the lockdown imposed on April 19 night will now continue until May 3. While new cases continue to rise, India's vaccination drive is gathering steam, the health ministry claims 14m doses have been administered in 99 days. India is also stepping up support programmes, saying will spend 260 billion rupees ($3.5 billion) to provide free food grain for two months to people covered under the state-run food programme.
  • SOUTH KOREA: After initially rising bond futures dropped into negative territory. 10-Year breaking out of Friday's range to print fresh lows, hitting the lowest since April 8. The 5-year auction was well received, cover for the issue rose despite the higher sale size and lower yield. Elsewhere, the MOF said it plans to issue KRW 300bn each of 2-, 3-year bonds in April on a non-competitive basis. This compares to KRW 600bn total in 2-,3- and 30-year bonds in March. The non-comp sales are part of the yield curve monitoring exercise the MOF flagged in March. There were reports on Friday that South Korea's ruling Democratic Party will discuss cash handout for all citizens. It remains to be seen how it will be funded. There have already been a number of special budgets to finance stimulus measures, the extra issuance associated with this has pushed yields higher.
  • CHINA: The PBOC matched maturities with injections for the thirty fourth straight session, the last time the bank injected funds into the financial system was Feb 25. The overnight repo rate rose 5 bps to 2.0696% as liquidity demands increase heading into holiday's next week. Bond futures are lower. More woes for China's Huarong who's bonds come under pressure today after the company said its 2020 results would be delayed past an April 30 deadline, after missing a March 31 deadline already. The report did not affect broader markets though, with 5-year corporate bond spreads barrowing to the tightest since March.
  • INDONESIA: Yields mixed across the curve, the belly selling off while the wings see buying. The ASEAN summit held over the weekend brought no game-changers. Indonesia pushed for a Myanmar-led dialogue on the ongoing political crisis in that country and joined Vietnam in calling for the resumption of bilateral negotiations on the delineation of the border between their EEZs. Local headline flow has been dominated by the news that Indonesia has found the wreckage of a missing submarine and declared all of the crew members dead.

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