Slightly Mixed, China CPI/PPI Data Tomorrow

Asian Government Bonds are slightly mixed.

• China government bonds are dealing slightly cheaper, with yields flat to 1bp higher.
• The market still awaits May New Loans/Aggregate Credit figures, ahead of May CPI and PPI data.
• South Korean sovereign bond curve is ~1bp richer after South Korea's first 10-days of June trade figures printed softer headline results. Exports fell -4.7% in y/y terms, while imports were down -7.4% y/y. The trade position was in deficit for the first 10-days of the month to the tune of $829mn, although this position tends to improve as the month progresses.
• The weaker headline export result partly reflected day count differences with June last year. Daily average exports were up 11.2% y/y, although this was down from the first days of May figure (16.5%y/y).
• There was also sharp deterioration on the primary income side. The net $5bn swing in investment income reflected a sharp pick up dividend outflows on foreign holdings of local equities.
• Global bond markets now keenly await two key events on Wednesday: the latest US CPI data and the latest thoughts from Federal Reserve Chairman Jerome Powell following the FOMC Decision.