Yields Decline As Governments Declare Support

Bonds mostly higher as risk assets lose some luster after German Chancellor Merkel announced stricter lockdown measures to be in place over Easter.

• INDIA: The RBI has announced that the government has cancelled this Friday's (March 26) auctions on review of cash balances. This saw bonds advance on the prospect of reduced supply, 10-year yield 2.6bps lower.
• SOUTH KOREA: Futures higher after the government said it will take steps to stabilize the bond market if needed. Vice Finance Minister Kim said financial authorities will flexibly adjust the sale volumes of Treasury bonds. "If volatility increases, the government will focus on stabilizing the bond market by taking timely actions through close cooperating with related agencies," said Kim. 20-year auction was fairly well received given increased size as the government aims to address yield curve inversion.
• CHINA: The PBOC matched liquidity injections with maturities, the twelfth straight day of matching maturities while the bank hasn't injected funds since February 25. The overnight repo rate is 7.5bps higher, but below last weeks peak. 7-day repo rate has declines 2.2bps to 1.98% after jumping as high at 2.75% yesterday. Bonds are higher, 10-year future up 2 ticks, a piece in China's financial press opined that the PBOC unlikely to tighten policy quickly.
• INDONESIA: Markets await the IDR 12bn sukuk auction later today, the government raised IDR 16.7tn from a retail sukuk auction yesterday, well above the IDR 10tn target despite the lowest return on record at the auction. Elsewhere Fitch affirmed Indonesia's long-term foreign-currency issuer default rating at BBB with a stable outlook. Yields mostly lower, some flattening seen.