Pressured In Asia

Most bonds in the Asia-Pac region are lower as equity markets continue to rally and markets digest strong data.

• CHINA: China's money market stabilised this week after jumping to multi-year highs last week. The bank injected a net CNY 96bn over the week, and just matched maturing issues in the last 2 days but used the 14-day reverse repo tool.
• SOUTH KOREA: The fixed income space in South Korea had seen a bid early on. After ticking up to highs of 129.54 the 10-year future dropped sharply after a weak 50-year auction. Some yield concession seen along with weaker cover as markets still harbour jitters over the additional budget and cash handouts. Last up 1 tick at 129.34. Some bull steepeners on the cash curve.
• INDIA: Fixed income under pressure in India after the RBI decision. The bank kept rates on hold, against an outside chance for a cut, and upgraded the outlook. The bank also announced a proposal to allow retail investors online access to government bonds directly through the RBI. This could help support bonds amid the massive issuance programme to support the expansionary budget in the coming fiscal year. Despite the programme, bond markets have sold off after the announcement as Das fails to outline any specific measures to support the bond market (i.e. outright purchases).
• INDONESIA: Yields higher as bonds sell off in Indonesia. GDP data was positive, the Indonesian economy shrank 2.19% Y/Y (est. -2.30%) & 0.42% Q/Q (est. -0.22%) in Q4, while growth for the entire FY2020 came in at -2.07% Y/Y (est. -2.10%). The curve has flattened slightly today, pushing back against the steepening seen in early February.