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Slightly Cheaper Despite Richening In Global Bonds After Israeli Strike

ASIA RATES

Asian Government bonds have experienced a slight cheapening, diverging from the richening in global bond markets during today’s Asia-Pac, spurred by Israeli missile strikes on sites in Iran. Cash US tsys are currently dealing 4-7bps richer across benchmarks.

  • China Government Bonds are dealing ~1bp cheaper, possibly reflecting diminishing expectations of a policy easing by the PBoC in April and news that foreign investors halted purchases of China’s sovereign debt for the first time since September.
  • (MNI) China’s reference lending rate will likely remain unchanged in April following the central bank’s decision to hold its policy rate steady as U.S. dollar strength weighs on the yuan and solid Q1 GDP growth reduces the need for monetary easing in the short term. (See link)
  • Foreign investors booked profits last month after a rally spurred by further monetary policy-easing bets. Overseas investor holdings saw the biggest monthly reduction going back to 2014. Foreign holdings of sovereign bonds at the end of March were 7.5% of the total outstanding.
  • The South Korean Sovereign Bonds are 1-2bps cheaper for 2-10-year maturities. This follows intervention signals from BoK Governor Rhee after the won dropped the most in more than a year. Rhee added that oil prices are currently the biggest factor affecting monetary policy and at least one or two months were needed before deciding on whether to signal a policy pivot.
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Asian Government bonds have experienced a slight cheapening, diverging from the richening in global bond markets during today’s Asia-Pac, spurred by Israeli missile strikes on sites in Iran. Cash US tsys are currently dealing 4-7bps richer across benchmarks.

  • China Government Bonds are dealing ~1bp cheaper, possibly reflecting diminishing expectations of a policy easing by the PBoC in April and news that foreign investors halted purchases of China’s sovereign debt for the first time since September.
  • (MNI) China’s reference lending rate will likely remain unchanged in April following the central bank’s decision to hold its policy rate steady as U.S. dollar strength weighs on the yuan and solid Q1 GDP growth reduces the need for monetary easing in the short term. (See link)
  • Foreign investors booked profits last month after a rally spurred by further monetary policy-easing bets. Overseas investor holdings saw the biggest monthly reduction going back to 2014. Foreign holdings of sovereign bonds at the end of March were 7.5% of the total outstanding.
  • The South Korean Sovereign Bonds are 1-2bps cheaper for 2-10-year maturities. This follows intervention signals from BoK Governor Rhee after the won dropped the most in more than a year. Rhee added that oil prices are currently the biggest factor affecting monetary policy and at least one or two months were needed before deciding on whether to signal a policy pivot.