CREDIT UPDATE: APAC Credit Spreads Steady, Asia Primary Picks Up
Aug-28 06:14
- Asian markets are mostly lower today, with Chinese technology stocks leading the decline amid disappointing earnings from major companies like Nongfu Spring and SenseTime. The HSTech Index is under pressure, and mainland Chinese stocks are also struggling. Sentiment is weak across the region as investors remain cautious ahead of Nvidia's highly anticipated earnings report. Japanese & South Korea equities are mixed as we have seen a late bounce in some of the major tech stocks names with Taiwanese names benefitting the most, while the Australian market is weighed down by concerns over inflation following a hotter-than-expected CPI reading.
- It has been a somewhat quiet session Australia today, similar themes remains with local account looking at topping off on some of the recent new issues. Primary continues to tick along with Mizuho Sydney A$ 3yr bond, NSW Port Finance looking at a 7yr and/or 10yr next week. The recent MQGAU, BNP, LLOYDS T2 are all trading about 1bps tighter today, while seasoned lines are steady, snr bank is unchanged. In corporates there has been some two-way in longer dated names, retail continue to pick up the higher yielding names such as PNHAU.
- FMGAU results were mixed and there remains some concerns around the iron ore price and the future economic viability of the global energy transition which has weighed on it's equity price.
- Asia credit market has followed Australia's lead with the busiest primary day in six weeks, Philippines led the way with a three tranche sovereign deal. In secondary today spread are little changed, Autos are about -1bps, Tech is +1bps ahead of Nvidia's earnings, Property is 1-2pts lower although liquidity is very thin with equity prices continuing to hit new all time lows.
- Quasis/SOEs are mixed today, with Korea & China SOEs +1bps, while Malaysian & Indonesian names continue the recent theme and trade -1/-2bps.
- Aus iTraxx CDS is unchanged at 61bps & while Asia Ex-J iTraxx is 0.5bp lower to 92bps
- Headlines: JPMorgan Sees Indian Firms Doubling Annual Dollar Bond Sales, China’s Credit Market Sees First Floating Rate Bond Since 2020
- Primary: Philippines $Bmrk; 5.5Y/10.5Y/25Y,+110a/+125a/5.5%a, JERA Co $Bmrk 5Y at +125 Area, Khazanah $Bmrk 5Y Sukuk at +115 area, 10Y at +125 area, Cathaylife Singapore $Bmrk 15NC10 Sub +190 area, Far East Horizon $Bmrk 3.5Y at +270 area.
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BUNDS: A busy week ahead
Jul-29 06:11
- The German 10yr Bund slowly edges to trade closer to flat going into and post Cash open, but is still nearer the July high at the start of a new week.
- It's a busy week ahead and Technically the risk remains tilted to the upside for the contract, while Month End should have no real impact in Govies, these are small for the US, average for the EU and a non event for the UK, looking at Bloomberg's extensions.
- Main resistance for the contract is at 133.21, the June high and the highest printed level since circa mid April.
- Small support is at 132.69 (gap), followed by 132.49, and 132.08.
- There's no tier 1 data for the day as investors await a busy Data week and Central Bank decisions (Fed, BoJ, BoE).
BTP TECHS: (U4) Trend Structure Remains Bullish
Jul-29 06:02
- RES 4: 120.20 2.00 proj of the Jun 11 - 21 - Jul 2 price swing
- RES 3: 119.55 1.764 proj of the Jun 11 - 21 - Jul 2 price swing
- RES 2: 119.00 Round number resistance
- RES 1: 118.73 High May 17 and a key resistance
- PRICE: 118.07 @ Close Jul 26
- SUP 1: 117.50/12 20- and 50-day EMA values
- SUP 2: 116.07 Low Jul 8
- SUP 3: 114.72 Low Jul 2
- SUP 4: 114.35 Low Jun 11 and key support
BTP futures traded lower last week but the contract has recovered from Friday’s low. The medium-term trend remains positive following recent strong gains. A resumption of the bull cycle would open the 119.00 handle next ahead of 119.55, a Fibonacci projection. Initial firm support is seen at 117.50, the 20-day EMA. The 50-day EMA lies at 117.12. The latest pullback is considered corrective and this is allowing an overbought condition to unwind.
MNI: SWEDEN JUN RETAIL SALES -0.1% Y/Y
Jul-29 06:00
- MNI: SWEDEN JUN RETAIL SALES -0.1% Y/Y
