BONDS: Early Bid Holds

The ruling Palang Pracharath Party (PPRP) reaffirmed its support for Prayuth Chan-o-cha as a prime ministerial candidate in the next general election, after its lawmaker said Prawit Wongsuwon should be the sole nominee.

• PPRP deputy leader Chaiwut played down comments by his colleague Rong and said the party did not discuss replacing Prayuth as its only prime ministerial candidate, the Bangkok Post reports.
• The recent court ruling allows Prayuth to remain in office until 2025, which means he would have to step down before the next parliament completes its term.
• The latest NIDA opinion poll published on Sunday showed that Prayuth was the most popular prime ministerial candidate among residents of the southern provinces, garnering 23.9% of the vote.
• When asked about their party of choice, about 27% said they would vote for the Democrat Party and 15% backed the main opposition Pheu Thai Party. The PPRP was picked by 11% of respondents.

1 month USD/KRW retraced sharply on Friday evening, in line with a softer USD tone. The pair got close to 1445, before finishing up just under 1429. We are slightly higher in early trading today, last 1432. It remains to be seen how much local drivers matter for the won today, as USD/JPY looks to be a key driver of shorter-term trends. USD/JPY has already had a near 3% range in trading today.

• Domestic focus points will likely centre on warning shots fired by both South Korea and North Korean armed forces, after a North Korea vessel crossed the northern limit line.
• The authorities are also stepping up support of the domestic credit sector. At least $35bn will be available in support for the sector, following recent spikes in commercial paper yields after a missed payment spooked sentiment in the sector (see this link for more details).
• The equity lead from offshore tech is a positive one today. The SOX rose 3.70% last week, for a weekly gain of just over 8%. The MSCI IT rose 6.25% last week.
• The Kospi is +1.60% in early trading. Last week offshore investors added net inflows for the week of +$212.4mn.

The Australian Office of Financial Management (AOFM) sells A$300mn of the 1.75% 21 June 2051 Bond, issue #TB162:

• Average Yield: 4.5576% (prev. 3.8973%)
• High Yield: 4.5700% (prev. 3.9000%)
• Bid/Cover: 1.5367x (prev. 2.5333x)
• Amount allotted at highest accepted yield as percentage of amount bid at that yield 52.5% (prev. 67.7%)
• Bidders 48 (prev. 52), successful 35 (prev. 19), allocated in full 32 (prev. 10)