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Several markets in the region closed, including India and Indonesia. The bond space was pressured by a sharp decline in US tsys after firmer than expected inflation.

• CHINA: The PBOC matched maturities with injections today, pausing a run of four days with CNY 10bn injection each. Repo rates are higher but in a similar pattern to yesterday have come off opening highs. Overnight repo rate is up 3.7bps at 1.9637% while the 7-day repo rate is up 3.4bps at 2.034%. Futures were unable to resist the move lower in UST's and have fallen in tandem with global bonds, 10-year down around 12 ticks at 98.13. Markets assess data from after-market yesterday that showed China's credit expansion slowed in April, a sign that the PBOC is steering credit growth lower. Aggregate financing fell to CNY 1.85tn from CNY 3.3tn in March and compared to estimates of CNY 2.29tn. In March the PBOC asked banks to reign in loan growth in a sign of tacit tightening.
• SOUTH KOREA: Bond futures are lower in South Korea, moving in tandem with global bonds. 10-Year future down 40 ticks at 125.29, the contract briefly touched 125.15 which denotes the lowest since March 19. A Moody's report earlier asserted that rapidly rising household debt in South Korea could leave banks vulnerable to economic shocks or interest rate rises. Data yesterday showed April household lending rose to KRW 1025.7tn.