EM ASIA CREDIT: Results: HDFC Bank (HDFCB, Baa3/BBB-/NR) - In Line

• A report in China’s 21st Century Business Herald suggests a heavy focus from the PBOC on bond market activity will result in the first batch of finesse being announced imminently with CNY10 m fines to be levied.
• Activities uncovered include disruption of market prices, artificial transferring the benefits from trades, not reporting trading activities and inappropriate internal oversight of bond market activities.
• It is known that on December 18 the PBOC summonsed firms to discuss what the Central Bank’s minimum requirements are when it comes to bond market trading.
• These minimum requirements focus on adequately assessing interest rate risk, activities supported by appropriate research and conducting all transactions in accordance with the law.
• Earlier in the week when the news of the meeting broke, bond yields moved higher yet since that time, they have again continued to fall.
• Today’s news article has again weighed heavy on markets and for the first time in many weeks, the 10YR yield has moved significantly higher, up +7bps to 1.78%

In Tokyo morning trade, JGB futures are holding overnight weakness, -8 compared to settlement levels.

• The BOJ minutes revealed that one member noted market rates might be lower than appropriate given the BOJ's economic and price projections and its monetary policy guidance. Another member highlighted the difficulty in confidently projecting medium- to long-term rate hikes due to uncertainties about Japan's neutral rate and the transmission mechanism of monetary policy.
• Life insurers were net buyers of long- and ultra-long-term JGBs for three straight months through November, making total net purchases of ¥2.9 trillion in the first 11 months, down 8.4% from a year earlier. (per BBG)
• Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s heavy session.
• Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is 0.4bp higher at 1.079% versus the cycle high of 1.113%.
• The swaps curve has twist-flattened, pivoting at the 10-year, with rates 1bp lower to 4bps higher. 

TYH5 is 108-18+, +0-03+ from NY closing levels. 

• Cash bonds are flat to 1bp richer in today’s Asia-Pac session after yesterday’s heavy session.
• Benchmark yields finished 3-7bps higher, with the 7-year leading.
• Meanwhile, 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).
• There was 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). This follows data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
• The 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%.
• Yesterday’s Tsy $69B 2Y note auction (91282CME8) came out on the screws: 4.335% high yield vs. 4.335% WI; 2.73x bid-to-cover vs. 2.77x prior. Today sees Tsy $28B 2Y FRN & $70B 5Y Note auctions.