EM ASIA CREDIT: MNI EM Credit Market Update - Asia
• U.S. 10y treasury yields are more or less unchanged so far at 4.5% with the Moody's downgrade reaction muted over the last couple of days. Asia EM credit is mostly better with govie/agency $ spreads up to 6bp tighter, the Philippines outperforming (-6bp).
• The Philippines Treasurer made a comment today that the US downgrade may affect spreads of Philippines $ debt. We think the downgrade action, now in line with the other agencies, is in general neutral for credit. That aside, the rational for the downgrade, higher debt and interest costs remains a fact.
• In terms of newsflow, its mostly about new issuance, Korea Railroad priced its $400m 3y deal overnight, in line with our fair value estimate (T+63bp). We also have new deals today from CDB Aviation (incl. $5y fixed), which comes with an IPT of T+115bp, we estimated FV at T+85bp. Finally, there is also a 2y $ deal from Korea Land & Housing (IPT T+90bp, FV estimate T+50bp).
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CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
- CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
- CARNEY SEES 2025-26 BUDGET DEFICIT OF CAD62.3B OR 2% OF GDP
- CARNEY PLANS TO REACH 2% NATO TARGET BEFORE 2030
- CARNEY SEES NEW CAD10B ANNUAL PLAN FOR GREEN TRANSITION BONDS
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
