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Yields Mostly Lower, China Bucks Trend


Yields mostly lower as markets track yesterday's moves in UST's, China bucks the trend despite upbeat inflation data.

  • INDIA: Bonds are supported today after the announcement of purchase programme details, but upside could be limited due to upcoming supply today. The RBI announced it will purchase INR 250bn across five of the most liquid lines on April 15. Meanwhile, markets await INR 320bn worth of auctions later in the session.
  • CHINA: The PBOC matched maturities with injections again today, the twenty fourth straight session of matching maturities, while the bank hasn't injected funds since February 25. The overnight repo rate is higher, last up 4bps at 1.7906% after opening just below 1.90%, the 7-day repo rate is 5bps higher at 2.00%, but still below the PBOC's 2.20% rate. Futures initially dipped after inflation data, but have since recovered, in the cash space yields are higher with the curve steepening. Inflation data was higher than consensus, CPI rose 0.4% compared to estimates of 0.3%, while PPI saw robust gains of 4.4% against estimates of 3.6%, the highest since July 2018. Commodity prices are cited as the main driver for PPI.
  • INDONESIA: Yields lower across the curve, declining for the seventh straight session. Indonesia will sell IDR 30tn of bonds at auction on April 13.
  • SOUTH KOREA: Bonds higher in South Korea on pandemic fears. Acknowledging the severity of the coronavirus situation in the country officials have said it is possible that new case numbers could double in the next 1-2 weeks, and that a situation worse than the third wave is possible. Officials also said that raising the social distancing level is possible if needed.

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