EM ASIA CREDIT: Bangkok Bank: new USD deal fair value
Nov-19 02:01
(BBLTB, Baa1neg/BBB+/BBB)
"*IPT: BANGKOK BANK $BMRK 144A/REGS 5Y +115BPS A/10Y +130BPS A" - BBG
New Issue: USD benchmark 5Y
IPT: T+115bp area (~z+147bp)
FV: T+83bp area (z+115bp)
New Issue: USD benchmark 10Y
IPT: T+130bp area (~z+174bp)
FV: T+91bp area (z+135bp)
Bangkok Bank issuing a new USD 5Y and 10Y bond. The issuer has a well-developed senior curve, which is about 5bp wider since the mandate was announced. We see fair value around z+115bp area for the 5Y and z+135bp area for the 10Y.
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AUSSIE BONDS: AU-US 10Y Diff Moves Away From Range’s Upper Bound
Oct-20 01:55
Cash ACGBs are 5-6bps cheaper on the day, but with the AU-US 10-year yield differential.
- At +14bps, the differential has narrowed from recent wides but remains in the top half of the ±30bps range that has prevailed since November 2022.
- A simple regression of the 10-year yield differential against the AU-US 1-year forward 3-month swap rate (1Y3M) differential over the past two years suggests the current spread is -2bps versus fair value.
- The 1Y3M differential, a key gauge of expected relative policy trajectories over the next 12 months, has increased around 75bps since June to be around the same level as October 2024.
Figure 1: AU-US Cash 10-Year Yield Differential (%)
Source: Bloomberg Finance LP / MNI
CHINA: House Price Decline a Not So Gentle Reminder ahead of 4th Plenum
Oct-20 01:43
- China's New and Used Home prices declines continued in September, picking up pace from the month prior.
- New home prices declined -0.41% (from -0.30% in August) and have declined month on month since May 2023. New home prices -2.66% YoY vs -2.95% in Aug.
- September saw Shanghai and Beijing prices up +0.30% and +0.20% respectively with falls in all all other reported markets.
- The cumulative month on month decline is nearing 10% since May yet with estimations of 40-50 million unsold properties, there could be more declines to follow.
- Used home prices fell -0.64% (from -0.58% in August). The last monthly increase in Used Home prices was April 2023 with the cumulative monthly decline now over 16%. Used home prices -5.24% YoY vs -5.51% in Aug.
CHINA: Central Bank Withdraws CNY64.8bn via OMO
Oct-20 01:29
- The PBOC issued CNY189bn of 7-day reverse repo at 1.4% during this morning's operations.
- Today's maturities CNY253.8bn.
- Net liquidity withdrawal CNY64.8bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.40%, from prior close of 1.40%.
- The China overnight interbank repo rate is at 1.30%, from the prior close of 1.35%.
- The China 7-day interbank repo rate is at 1.41%, from the prior close of 1.40%.
