EM ASIA CREDIT: Security Bank Corporation (SECBPM, Baa2/NR/NR) Q1 numbers out

• Having hit new highs, yesterday saw gold slip lower into the close as profit taking on strong gains was evident yet in the Asian trading day, the rally continued.
• Gold opened at $3,210.93 and had a slow start to the trading day before jumping to $3,228.33, a gain of +0.54%
• South African miner Gold Fields Ltd has been ordered to stop mining its lease and leave one of its mines in Ghana after the rejection of a lease extension.
• West Australian miner Bellevue Gold is the target of several takeovers as the soaring cost of gold eats into its cashflow due to soaring hedge costs.
• The PBOC is offering increased quotas to banks for gold imports to meet the domestic demand from institutional and retail investors.
• Gold remains steadfast above all major moving averages with the nearest, the 20-day EMA, at $3,091.86

TYM5 has traded in a tight 110-19/110-27+ range so far in today's Asia-Pac session. Going into the London open, it is dealing near its highs around 110-26,+0.02 from its close.

• The US 10-year yield has continued to drift lower in a tight range of 4.3408 - 4.3856 in Asia. Going into the London open dealing around 4.3485%.
• The market is starting to realise the FED will not be stepping in to rescue it by cutting rates, as long as it expects inflation to track higher on the back of Trump’s policies.
• The Fed’s Waller said yesterday the impacts of the tariffs on inflation would be temporary. He also described the new policy as “ one of the biggest shocks” on the US economy in decades, the effects of which are highly uncertain.
• Bostic spoke after the US market close: ”Right now range of possible outcomes has multiplied. Inflation still much higher than target. Not in position to boldly move in any direction, need more clarity.”
• Bessent says the Treasury has a big toolkit if needed for Bonds.
• Dips in the 10-year yield back towards 4.25/30% should now find supply, any move back to 5% and above would become problematic for equities.
• Upcoming Data/Events: Retail Sales and Fedspeak from Powell on Wednesday.

The 20-year JGB auction delivered poor results across key metrics. The low price underperformed dealer forecasts, which were set at 100.40 according to a Bloomberg poll. Moreover, the cover ratio decreased to 2.9639x from 3.4594x in the previous auction and the auction tail lengthened dramatically to 0.34 from 0.20. 

• As noted in the auction preview, today’s offering featured an outright yield at a cycle high, 15bps higher than last month’s auction.  
• Moreover, the 10/20 yield curve was at its steepest since 1999 and the 20-year JGB was at its cheapest valuation within the 10/20/30 butterfly since early 2023.
• As a consequence, this result is likely to be seen as significantly worse than the mixed performance observed in the 30-year JGB auction earlier this month.
• Post-auction, the 20-year JGB is little changed.