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- INDIA: Yields lower in early trade. Bonds are supported today by a number of factors including the GSAP announcement and borrowing plan. The short end in particular is expected to be supported after the RBI kept the borrowing programme for the first half of fiscal 2022, the FinMin had said in May that borrowing would be increased in order to provide support funds to states. Instead, the government released INR 750bn from its own borrowings to compensate for a tax revenue shortfall. The Central Bank announced eligible issues for the next GSAP operations yesterday, the RBI will purchase INR 200bn on July 22 and this time has included illiquid paper, a major criticism of the previous operations.
- SOUTH KOREA: Bonds future lower in South Korea, 3-year and 10-year futures plunged after a more hawkish than expected BoK yesterday, the 3-year held the bulk of the move while the 10-year recovered into the close. BoK Governor Lee did briefly reference the bond market yesterday, saying the government could take steps to stabilise markets if needed, which would include buying more bonds. The reference was brief and nothing new from the Governor, though. Elsewhere the government has hired several banks as arrangers to sell foreign-currency denominated bonds according to Yonhap Infomax, the sales could be up to $1.5bn in September. Bank of America Merrill Lynch, Citi, JPMorgan, Credit Agricole, HSBC and KDB have all been hired.
- CHINA: The PBOC matched maturities with injections at its OMO operations today, after rolling over CNY 100bn of MLF funds which equates to additional liquidity of CNY 700bn when takin in conjunction with the 50bps RRR cut last week. Still, repo rates are near the top of recent ranges, the overnight repo rate up 21bps at 2.17%, the 7-day repo rate in line with the PBOC's rate at 2.20%. Futures are flat, holding a tight range after dropping recent highs during yesterday's morning session. In the China Securities Journal there was a report citing a bond investment manager posited that the unchanged MLF rate shows the PBOC is not making dovish moves and the recent policy adjustments have been to address liquidity.
- INDONESIA: Yields higher across the curve with some bear flattening seen, bonds under pressure after S&P cut its 2021 growth forecast for Indonesia by 1ppt due to its coronavirus situation. Indonesia reported another record-breaking surge in new virus cases on Thursday, adding 56,757 infections. Elsewhere, Indonesian Finance Ministry said that the country's fiscal revenue will benefit from a G20 global tax deal, which would allow Jakarta to tax income of large multinational companies.