EM CREDIT SUPPLY: China Orient (ORIEAS): New USD fair value
"IPT: China Orient Asset Management $Bmark 3Y Reg S +140a" - BBG
New Issue: USD benchmark 3Y
IPT: T+140 area (z+164bp)
FV: T+86bp area (z+110bp)
Joy Treasure Assets Holdings Inc., an SPV owned by China Orient Asset Management International Holding Ltd. (also guarantor), is coming to the market with a new USD 3Y deal. China Orient is one of the largest China state backed distressed asset management companies (AMC).
In terms of fair value, we include the existing Joy Treasure Assets Holdings USD 6/29s, issued last year, as an anchor for the analysis, as well as recent issues (last 2 years) from Great Wall China and China Cinda, other important AMCs'. We believe fair value will be close to the existing USD 6/29s at z+110bp area.
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RBA: Bullock May Sound Cautious On Further Easing, Q3 CPI Still Come
RBA's Bullock gives a fireside chat later, at the ABE dinner (7:15pm AEDT). This is the final RBA speak before next Tuesday's monetary policy outcome. It may be the case Bullock stays quite non-committal around easing risks at that meeting (in Bullock's style of not ruling anything in or out). Market pricing is delicately poised, with a 25bps cut around 60% priced per OIS dated RBA contracts for the Nov meet. A full cut is more than priced for the Fed 2026 meeting (but not quite for the Dec meeting this year). The AUDUSD is eyeing a break above 0.6540 (which marks the 50-day EMA), which could then see 0.6600 tested.
- We still have the Q3 CPI print on Wednesday this week, which could see Bullock staying neutral with regards to giving a strong bias this evening. The trimmed mean is expected to show disinflation stalling in Q3 at 2.7%. She mentioned that there are early concerns around services prices and so the market services CPI will be monitored closely.
- September labour market data were the main release since the 30 September decision and showed a 0.2pp rise in the unemployment rate to 4.5%. Monetary policy centered questions may focus on this data but Bullock has said previously that given volatility it is best to focus on the 3-month average which was consistent with a gradual easing in conditions.
- It is worth noting that NAB survey and SEEK vacancy data suggest that the labour market may have stabilised and possibly improved going into Q4.
CHINA: Bond Futures Rally on Liquidity Injection
- The largest liquidity injection via the OMO in almost 2 weeks gave bonds a boost Monday with all major bond futures higher.
- The 10-Yr is up +.11 at 108.13, bouncing off the 20-day EMA of 108.03.
- The 2-Yr is up +0.04 at 102.37, moving above the 20-day EMA of 102.36, near to the 50-day EMA of 102.38.
- The CGB 10-Yr is down -1bp at 1.84%
CHINA PRESS: CSRC Deploys Key Focuses For Capital Market Reform
The China Securities Regulatory Commission will focus on strengthening the resilience and risk resistance of the capital market, improving the inclusiveness and adaptability of the market system, and deepening market opening to a higher level, Securities Daily reported. Analysts cited by the newspaper said the regulator will need to step up IPO supervision while enhancing the regular delisting mechanism, improve corporate governance, optimise mergers and acquisitions, restructuring, and equity incentive systems, and promote a stronger sense of responsibility among listed companies.
