Indian Coronavirus Concerns Continue To Dominate Narrative

An uneventful session with liquidity sapped as Chinese markets remain closed for an ongoing holiday.

• INDIA: Yields mixed in India in early trade. Focus today falls on an INR 149bn state debt sale for clues of demand ahead of an INR 320bn government securities sale on May 7. Elsewhere, concerns over the coronavirus situation in India remain elevated, Indian PM Modi is still resisting pressure to declare a country wide lockdown despite please from international leaders. Two weeks ago Modi asked states to use lockdowns only as a last resort in order to maintain the economic recovery
• SOUTH KOREA: Futures in South Korea are higher, moving sharply higher at the open in sympathy with US Tsys. Futures are off session highs, retracing the move as markets digest CPI data earlier in the session. South Korean CPI rose at the fastest pace since 2017 in April, rising 2.3% Y/Y against estimates of a 2.1% gain and faster than the 1.5% rise in March. Core CPI rose 1.4% against estimates of 1.2%. Tracking subcomponents, the increase was driven by commodity and energy prices thanks to a low base effect, while agricultural products also rose. At the April meeting BoK Governor Lee noted that inflation would hover around the bank's 2% target with the possibility of an overshoot, before slipping later in the year.
• INDONESIA: Yields mixed across the curve in Indonesia, the belly seeing buying wile the long end endures selling. Market participants await an IDR 10tn sukuk auction. Data yesterday showed Indonesian CPI rose less than expected in April, the Y/Y print came in at 1.42% against expectations of 1.5%, while core prices rose 1.18% against estimates of 1.24%.