Front End Rates Mostly Skewed Lower This Week

INDIA

• In a week dominated by the new budget, it was easy to miss the analysis showing the benefit of India’s inclusion in the JPMorgan index recently
• Long dated demand from overseas investors (according to The Clearing Corporation of India showed that the maturity of over 20% of foreign investors holdings were in excess of 10 years, per BBG).
• The addition of India into the benchmark is timely given the recent budget committing to continued fiscal targets and voices within the Central Banks entertaining the idea of cuts.
• As with other Central Banks globally, the Indian Central Bank’s decision makers will be considering their next moves in the context of FED moves
• Bonds performed well across the curve today as yields finished lower on the week

2yr 6.762 (-4bp) 6.856% (-2bp) 6.943% (-1bp) 7.027% (-0.5bp)

INDONESIA

• In the absence of key data releases the Indonesian market took guidance from good demand for new issues and regional expectations for rate cuts.
• New issues drew up to 4 times demand for the new securities issued in 2029, 2034, 2043 and 2054 maturities
• Yields finished lower for the week across shorter dated maturities with intermediate to longer dated securities finishing flat to marginally higher due to issuance.

2yr 6.762% (-4bp) 5yr 6.856% (-2bp) 10yr 6.943% (-1bp) 30yr 7.027% (-0.5bp)

SOUTH KOREA

• The week was dominated by weaker than expected data pushing investors to position for rate cuts.
• This puts the BOK in an interesting position ahead any moves by the FED and property prices in Seoul rising more than expected.
• Bond yields followed regional trends with most maturities finishing the day lower with the exception of 3-5 year maturities, following KRW1.1tn of issuance.

2yr 3.107% (-1.5bp) 5yr 3.087% (+3bp) 10yr 3.119% (-1bp) 30yr 3.00% (-0.5bp)