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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

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  • INDIA: Bonds lower as oil prices continue to rally, while market participants await an announcement from the government on borrowing plans for second half of the fiscal year which begins on October 1. India originally planned to sell INR 12.1t this year, but later added INR 1.58t to the bill to compensate states for a shortfall in consumption tax collection, though the additional borrowing is yet to transpire. The 1H total currently stands at INR 7.05t, lower than the INR 7.24t planned. Later in the week participants will look forward to an INR 150bn bond purchase under the GSAP operations scheduled to take place on September 30, the RBI announced last week that this will be a twist operation (issuing shorter dated paper simultaneously) to address liquidity issues.
  • SOUTH KOREA: Futures are higher, 10-Yr just below Friday's high, 3-Yr seeing a smaller move higher. In the cash space yields are lower across the curve, with some bull steepening seen. South Korean FSC chairman Koh spoke earlier, he said that strong preemptive measures would be taken against household debt and that a prolonged low rate could not last. This follows a signal that more BoK rate hikes are on the cards, the Bank said on Friday in its quarterly financial stability report that South Korean companies and households should be able to handle the impact of another interest-rate hike to 1%. Markets look ahead to the 5-Year auction later in the session.
  • CHINA: The PBOC injected CNY 100bn of 14-day reverse repos at 2.35%, the injection helped subdue repo rates; the overnight repo rate is in line with recent levels at 1.7018%, while the 7-day repo rate is at 1.7452% after hitting highs above 2.60% yesterday. Futures are higher, 10-Year up 7 ticks at 100.00, approaching Friday's high of 100.055. Elsewhere focus remains on Evergrande, the firm remains silent on its $83m dollar bond interest payment that was due last Thursday, while there are reports that another real estate firm Sunac has sought help from local authorities.
  • INDONESIA: Yields higher across the curve, some flattening seen. Indonesia reported the lowest number of Covid-19 infections in over a year on Sunday while the death count continues to fall, paving the way for potential further relaxation of rules, however a shortage of healthcare workers and logistical flaws are impeding inoculation efforts.