EM ASIA CREDIT: MNI EM Credit Market Update - Asia
Asia EM credit is mostly better this morning with govie/agency $ spreads 1-4bp tighter. India is outperforming, with our $ proxy, the Export Import Bank India 4bp tighter. Indeed, for now, Asia is shrugging off rising risks in the middle-east, where Israel may be preparing to strike Iran. In terms of newsflow, the morning has been relatively quiet, but we are seeing new issues. There is a new Seazen $ 3NCNP2, with an IPT of 13.25%, we estimated fair value at 12.85%. There is also a new Tai Fung $perp (up to $280m), a Bank of Communications 3y $ FRN and a Guangdong Hengjian $ 3y in the market.
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JGBS AUCTION: 30-Year JGB Auction Results
The Japanese Ministry Of Finance (MoF) sells ¥604.8bn 30-Year JGBs:
- Average Yield: 2.941% (prev. 2.414%)
- Average Price: 91.40 (prev. 99.75)
- High Yield: 2.961% (prev. 2.457%)
- Low price: 91.10 (prev. 99.00)
- % Allotted At High Yield: 52.8571% (prev. 33.8235%)
- Bid/Cover: 3.0739x (prev. 2.9582x)
JGBS AUCTION: Poll: 30-Year JGB Auction
*JAPAN 30Y GOVT BOND AUCTION MAY HAVE 91.10 LOWEST PRICE:POLL – BLOOMBERG
JGBS AUCTION: 30Y Supply Faces A Much Higher Yield
The Japanese Ministry of Finance (MoF) will today sell Y800bn of 30-Year JGBs. The MoF last sold 30-year debt on 8 April 2025.
- This month’s 30-year JGB auction features an outright yield approximately 50–55 basis points higher than last month’s issuance. Notably, the current yield is hovering just below its cycle high of 3.0%.
- The 10s30s yield curve is now 5–10 basis points steeper than at the time of the previous auction, though still around 10 basis points below its recent peak.
- On a relative value basis, the 30-year bond remains largely unchanged versus last month when viewed through the 20-/30-/40-year butterfly spread.
- Today's supply comes amid weakening sentiment toward longer-dated global bonds, weighed down by positive trade deal developments, consistently strong U.S. economic data, and a further pushback in expectations for Fed rate cuts.
- Against this backdrop, today’s 30-year auction will serve as a key gauge of investor appetite in the face of heightened uncertainty.
- Results are due at 0435 BST / 1235 JT.
