The Twist You Can See Coming

Indian bond markets remain centre of attention after RBI Governor Das's unscheduled speech unveiled several new measures yesterday, while OMO operations today will be eyed.

• INDIA: Yields mostly lower in early trade, adding to declines yesterday. Bond traders will focus on the INR 100bn operation twist today, as well as digesting the additional measures announced by RBI Governor Das at an unscheduled press conference yesterday.
• SOUTH KOREA: Futures are higher in South Korea, 10-year future near session highs, up 22 ticks at 125.77, 3-year future up 7 ticks at 110.83, both contracts rose at the open. On the coronavirus front South Korea reported 574 new cases on Thursday, down from 676 on Wednesday. Minutes of the BoK's April meeting were released late on Tuesday (followed by a market closure on Wednesday), the minutes showed members expect export and investments likely to continue to improve, while consumption and employment are expected to gradually recovery. Members were cognizant of risks of another wave of the virus, and also agreed to look through inflation.
• CHINA: Futures added to gains after safe have assets went bid following the NDRC announcement of the indefinite halt of all activities under the China-Australia economic dialogue. The PBOC conducted a net drain from the financial system today to the tune of CNY 40bn, the last time the bank injected liquidity was Feb 25. The overnight repo rate declined to 2.10% after jumping as high as 2.40% on Friday prior to the Labor Day break.
• INDONESIA: Yields mostly lower with some bull flattening, data showed GDP fell 0.74% Y/Y in Q1, against estimates of a 0.65% fall, dragged down by consumer spending. Indonesian Economic Min Hartarto said Wednesday that the gov't expects domestic economy to rise 6.9-7.8% Y/Y, which would be the fastest pace of growth since 2008. Hartarto noted that "the trend of economic recovery is toward positive growth" and "the curve is V-shaped."