EM ASIA CREDIT: Bharti Airtel (Baa3/BBB-/BBB-) Positive Outlook with Moody's

BOJ-dated OIS pricing is marginally softer than pre-Dec MPM levels.

• Nevertheless, pricing remains 3-13bps firmer beyond January versus pre-October MPM levels, with the September/October 2025 contracts showing the strongest gains.
• Market expectations currently indicate: a 37% probability of a 25bp hike in January; a cumulative 95% chance by May; and a full 25bp increase not fully priced in until June 2025.
• A full 25bp hike had been priced by May before the December MPM.

Figure 1: BOJ-Dated OIS – Today Vs. Pre-BOJ MPM (October)

Source: MNI – Market News / Bloomberg

• RES 3: 149.55 - High Mar 22 (cont)
• RES 2: 147.74 - High Jan 15 and bull trigger (cont)  
• RES 1: 144.48/146.53 - High Nov 11 / High Aug 6 
• PRICE: 142.24 @ 16:29 GMT Dec 23
• SUP 1: 141.88 - 1.618 proj of the Aug 6 - Sep 3 - 9 price swing 
• SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
• SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing   

Markets slipped on the hawkish Fed, touching 141.87 on the way lower before rebounding back to flat on the dovish BoJ decision. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.88 and 141.56, Fibonacci projection points on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont). 

In post-Tokyo trade, JGB futures closed weaker, -9 compared to settlement levels, after a heavy NY session for US tsys. Benchmark yields finished 3-7bps higher, with the 7-year leading.

• Projected US rate cuts into early 2025 were steady to slightly lower vs. yesterday’s open (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).
• Little reaction to a flurry of mixed data: November posted improved home sales figures compared with a soft October, but revised New home sales came in roughly as expected at 664k on a seasonally-adjusted annualized rate, up from 627k prior (upwardly revised from 610k), following on from data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
• Headline durable goods orders figure of -1.1% M/M, the "miss" vs -0.3% expected was offset by an upward revision to the prior growth reading to 0.8% from 0.3%. Transportation equipment - a typically volatile category - led the decline, falling -2.9% M/M, with nondefense aircraft/parts down 7.0%.
• Today, the local calendar will see BOJ Minutes of Oct. Meeting and Dept Store Sales alongside an Auction for Enhanced-Liquidity 15.5-39 YR.