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EUROZONE ISSUANCE

EGB Supply For W/C Sep 20, 2021

USD

Sees broader base buying, led by risk

US TSY OPTIONS

BLOCK, Oct 5Y Puts

BUNDS

2s/10s steepest since

US TSY OPTIONS

Background on Large 5Y Put Buy

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Bonds spent the session treading water on Monday, markets shaking off the weak auction from Friday and choosing to focus instead on rising GST collections and a pickup in PMI figures. Markit India manufacturing PMI rose to 55.3 in July, up from 48.1 in June, helped by lower coronavirus case numbers.

  • Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: "It's encouraging to see the Indian manufacturing industry recover from the blip seen in June. Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production, amid a rebound in new business and the easing of some local COVID-19 restrictions. Should the pandemic continue to recede, we expect a 9.7% annual increase in industrial production for calendar year 2021."
  • Elsewhere there were reports that India's plan to sell two state-controlled lenders could be deferred to next financial year, the government is yet to seek parliament's approval for law changes needed for the sale to go ahead.
  • Markets await services PMI data tomorrow but focus remains on the RBI rate announcement later in the week. Bond traders will also watch today's INR 125bn state debt sale ahead of the INR 260bn sovereign debt sale on Friday.