Under Pressure

Bonds in general under pressure, a negative tone overall after losses in US equity markets is failing to provide a bid for bonds in the region.

• INDIA: Bonds under pressure as markets continue to digest the elevated number of COVID-19 cases with reports of hospitals under pressure. The PM has said that "The government has been working hard from over a year to ensure that maximum numbers of Indians are able to get the vaccine in the shortest possible of time". Higher oil and rises in US yields also expected to weigh on Indian bonds.
• SOUTH KOREA: Bonds are lower in South Korea, pressured by a global sell off. 10-year future is down 33 ticks, reversing an initial gain. The move lower retraces less than half of the move higher yesterday. The 3-year contract has proven more resilient, down 1 tick. As a reminder, the MOF sold a total KRW 2.8tn of 10-year debt yesterday, while the Bank of Korea will sell KRW 2.1tn 2-year MSB's tomorrow, and the MOF will bring 10-year linkers to market on Friday.
• CHINA: Futures in China are higher, though moves are muted in early trade, but as usual Chinese bond markets are defying the broader regional tone. The PBOC matched maturities with injections, the thirty first straight session, the last time the bank injected funds into the financial system was Feb 25. Repo rates rose, the 7-day repo rate stuck at the prevailing rate of 2.20% after rising above the level yesterday. China kept its Loan Prime Rates (LPR) on hold at 3.85% and 4.65% for the 1-year and 5-year, respectively. This is the twelfth month of unchanged rates, was widely expected and received to little fanfare.
• INDONESIA: Bond yields mostly lower, but moves muted compared to yesterday as markets await the BI rate announcement. Bank Indonesia are set to leave their benchmark interest rate unchanged for a second straight meeting, as rupiah depreciation and preliminary green shoots of economic recovery rule out further policy easing, but subdued inflation calls for keeping monetary policy conditions accommodative.