EM ASIA CREDIT: Yinson Holdings: Potential buyout by PE

TYM5 has traded lower within a range of 111-04 to 111-11 during the Asia-Pacific session. It last changed hands at 111-10, unchanged from the previous close.

• The US 10-year yield is a little higher, dealing around 4.31%, up 0.02 from its close.
• The US 2-year yield is a little higher, dealing around 3.80%, up 0.02 from its close.
• The People's Bank of China, announced today a cut to the seven-day reverse repurchase rate to 1.4% from 1.5%. 
• The PBOC also announced a reduction in the amount banks must own in reserve (known as the RRR) by 0.5% which is expected to see CNY1tn of long term capital released into the market.
• The PBOC also announced two new funding schemes of up to CNY800bn to support the stock market. These announcements aim to stabilize markets and expected to lower borrowing costs for those looking to invest in the stock market.
• Treasuries opened lower on the news of the US-China meeting but has since clawed back those losses during the session as the market awaits the FOMC later.
• The 10-year Yield range seems to be 4.10% - 4.45%, price has moved back to the 4.30% pivot and with more supply to come this week a good chance this level holds. Focus will be on the FOMC tonight and Powell's statement.
• Data/Events :  US FOMC

• the various measures announced by the PBOC will have longer term implications for the bond market as financial institutions will likely be selling bonds held as reserves.  
• This is a longer run story but could not doubt put upwards pressure on yields going forward.  
• Bond futures have reacted to the announcement with the 10YR lower by -0.19 at 108.86.  The  move lower puts the 10YR in touching distance with the 20-day EMA of 108.80 which it hasn't trade through since early April.  
• The 2YR bond future by contrast is unchanged at 102.322 and remains below all major moving averages.  The nearest being the 20-day EMA at 102.40.
• The cash market is seeing yields higher with the CGB10YR up by +1bp at 1.64%.
• The next major test for the bond market will be Friday when the central government issues CNY71bn of 2055 and CNY170bn of 2026 bonds

• In September the concept of the “national team” was created which effectively is key asset management companies through which support for equity markets will occur.  Today sees the addition of two more entities being China Chengtong Holdings, China Reform Holdings and Central Huijin Investment Ltd.
• The PBOC also announced two new funding schemes of up to CNY800bn to support the stock market.
• These announcements aim to stabilize markets and expected to lower borrowing costs for those looking to invest in the stock market.
• The funding schemes will have lower interest rates than those on offer previously.
• The PBOC noted of their intention to support insurance companies in their investing in stock markets also
• The PBOC announced further support for Central Huijin Investment Ltd (a state owned investment company) to allow it to increase its index holdings in the stock market.