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Futures in China made a fresh contract high after resuming their move higher, while futures in South Korea rose on coronavirus concerns. Participants in India await an INR 260bn bond sale.

  • INDIA: Yields lower early trade, reversing some of Thursday's rise. Markets await the results of an INR 260bn bond auction which includes the second tap of the new 10-Year issue. Yields rose yesterday despite a strong showing at the RBI's GSAP operation with cutoff yields lower than expected, which could indicate some set up ahead of today's auction. Elsewhere local currency corporate bonds are on track for their best week in four as the average yield on a three-year corporate issue falls 7bps.
  • SOUTH KOREA: Futures higher from the off in South Korea, 10-year contract sharply higher from the open after declining from contract highs at 128.37 earlier this week. 3-Year future weighed down by BoK rate hike expectations sees a more muted move. In the cash space yields are lower in early trade, which a touch of bull steepening evident. as officials declare a two-week extension to the toughest set of lockdown measures currently in place in greater Seoul. There were 1,630 new cases in the past 24 hours, down from a record high of 1,842 yesterday.
  • CHINA: The PBOC matched maturities with injections today, repo rates are lower today and moving back into more comfortable ranges while the 7-day repo rate has moved back above the overnight repo rate after briefly inverting earlier this week. Futures are higher today, resuming their recent rally after dropping for the past two sessions. 10-Year future makes a new contract high as stocks drop into negative territory and snap a four-day winning streak. Elsewhere, guidelines published by the central government late yesterday show plans to promote the advanced manufacturing sector and "appropriately increase" local government bond quotas in central provinces.
  • INDONESIA: Yields higher in Indonesia, bonds weighed on by the Bank of Indonesia after it lowered the 2021 growth target yesterday due to impact of the pandemic. The Central Bank kept rates on hold by lowered growth forecasts to 3.5% to 4.3% from 4.1% to 5.1% estimated previously. Elsewhere there were reports from the finance ministry that the government could tap offshore bond markets for a dollar sale in Q3 or Q4