Indian Auctions In Focus After GSAP

South Korea futures higher alongside the earlier move in UST's even as exports continue to soar, market focus in India turns to today's auctions after a successful GSAP operation yesterday.

• INDIA: Yields lower in early trade. Bonds gained yesterday after the RBI conducted its second GSAP operation for INR 350bn, the market was reassured that the bank bought a decent chunk of total purchases in the 10-year sector, buying INR 83.5bn of the 5.85% 2030 issue at 5.9526%, the 10-year is seen as the anchor point for the yield curve. The operation also bodes well for today's auction, with cut off yields well below prevailing market level demand is expected to be boosted.
  
• SOUTH KOREA: Futures are higher, gapping up at the open following a similar move in UST's. Data earlier showed PPI rose 5.6% Y/Y in April compared to the 3.9% rise in March, the April print denoted the biggest gain since 2011 and was attributed to higher commodity prices. Other data showed exports rose 53.3% in the first 20 days of May, compared to 45.4% in the April period. On the coronavirus front South Korea will extend its current social distancing measures for another three weeks. "The number of new daily average patients as of late remains in the 500 level, not budging below that point, and infections are continuing from all quarters in our daily lives," Prime Minister Kim Boo-kyum said. South Korea reported 561 cases in the past 24 hours.
• CHINA: The PBOC matched maturities with injections today, the overnight repo rate down 9.8bps at 1.9812% while the seven day repo rate is up 10bps at 2.10% but off opening highs at 2.20%. Futures are higher as equity markets dip, the 10-year up around 11 ticks but a shade below yesterday's high of 98.425. Markets continue to digest comments from China's cabinet earlier this week that repeated warnings over commodity prices and attached inflation. The comments indicate the government will use administrative price caps and supply measures to curb commodity prices, rather than tightening monetary policy.
• INDONESIA: Yields lower across the curve with some flattening seen. Data showed Indonesia's Q1 current account deficit widened more than expected to $1bn against an expected $0.73bn. Indonesia's trade surplus unexpectedly swelled in April, yesterday's report showed. A larger than forecast jump in exports (and, indeed, the fastest increase in more than a decade) underpinned overall trade balance. Exports were boosted by buoyant commodity markets, with oil and gas, m'fing & mining exports seen as main contributors to the headline reading.