EM ASIA CREDIT: MNI EM Credit Market Update - Asia
Apr-02 05:00
- Asia EM govie/agency bond spreads are mostly better in the morning session, with the Philippines outperforming ($10y -5bp) on the back of a surprise contraction in the March PMI figure (+49.4 versus +51 in the prior period). Asia equities are also mostly modestly higher. In terms of newsflow, there continues to be some attention on the Xiaomi SU7 accident, with the risk to brand image heightened given the SU7 is the only model produced at present.
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ASIA STOCKS: Equities Higher On Strong China Data
Mar-03 04:54
Asian markets kicked off the week with solid gains, buoyed by upbeat Chinese factory data and a positive close on Wall Street at the end of February.
- Hong Kong’s HSI jumped 1.2%, driven by a 2% rise in the HS China Enterprises Index, with tech giants like Alibaba (+4.6%), Tencent (+3.7%), and Meituan (+2.5%) leading the charge, while the debut of Mixue Bingcheng’s shares soared 40% after its $444 million IPO. The Shanghai Composite edged up 0.3% to 3,332.27, and the CSI 300 rose as much as 1% before paring some gains, supported by stronger-than-expected February PMI data reflecting increased new orders amid tariff-driven export rushes, though the ChiNext jumped nearly 2.9%.
- In Japan the Nikkei 225 climbed 1.6%, while the TOPIX jumped 1.80&, while Australia’s ASX 200 advanced 0.8% reflecting optimism around potential US rate cuts and a pause in yen appreciation.
- However, Taiwan’s Taiex dropped 1.5%, and Bangkok’s SET fell 0.7%, while South Korean markets were closed for a holiday.
- Investors are focused on China’s upcoming National People’s Congress, hoping for a significant stimulus package to counter US tariffs—set to rise to 20% on Chinese goods this week—though uncertainty lingers as traders watch for last-minute tariff negotiations and broader geopolitical developments.
JGBS: Futures Weaker & Near Lows, US Tsys Weighing
Mar-03 04:49
JGB futures are holding weaker at session cheaps, -30 compared to the settlement levels.
- Outside of the previously outlined Jibun Bank Manufacturing PMI data, there hasn't been much by way of domestic drivers to flag.
- Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after an emergency security summit in London on Sunday raised bets that haven demand could lose its appeal should prospects improve for an end to fighting in Ukraine.
- Nevertheless, this weakness has started to reverse as some anticipate that slower US growth expectations could see traders increasingly price in a potential Federal Reserve rate cut as soon as June.
- “Moreover, the risk of a government shutdown from March 15 appears greater than ever.” (per BBG)
- Cash JGBs are flat (40-year) to 3bps cheaper (5-10-year zone) across benchmarks. The benchmark 10-year yield is 2.6bps higher at 1.404% versus the cycle high of 1.466%.
- The 30-year yield is 0.6bp higher at 2.366% after hitting a high of 2.371%, the highest since 2008.
- Swap rates are 1-2bps higher. Swap spreads are mixed.
- Tomorrow, the local calendar will see Labour Market, Capital Spending, Company Profits, Monetary Base and Consumer Confidence data alongside 10-year supply.
CHINA: Bond Futures Higher Ahead of NPC.
Mar-03 04:36
- Bond futures are stronger today as China’s National People's Congress is about to kick off.
- China’s 10YR future is up +0.09 at 108.295, following Friday’s close of 108.205.
- The 10YR is at the mid-point of the 50-day EMA and the 100-day EMA as the 20-day EMA loses momentum.
- China’s 2YR future is up +0.06 today at 102.652, following Friday’s close of 102.59.
- The 2YR future has breached the 200-day EMA of 102.63 and is trending upwards with the 20-day EMA trending lower at 102.68.
- There is considerable expectation built up from this year’s NPC with both monetary and fiscal policy announcements expected.
- China’s authorities generally keep markets stable around the NPC.
