EM ASIA CREDIT: The main stories out of the region
** The main stories out of the region**
The 10yr U.S. treasury yield is 3bp tighter at the time of writing, with a sharp move into the close. Asia EM govie/agency bonds remained largely unchanged, with no standout movers, perhaps a slight bias toward tightening. Sovereign CDS widened marginally on the day. Equities in Asia continued their rally, particularly in tech, as seen in the HSI gaining +4%.
In terms of newsflow, South Korea is considering new tariffs on China steel imports, a positive for Posco. Alibaba released Q3 results, which were ahead of consensus, but overall neutral for spreads. In contrast, the equity market continued to see AI related gains in the stock, with equity +8% on the day. PTT Public, the Thai petrochemical company, reported Q4 results that were materially weaker than consensus. Negative for spreads. Finally, Vedanta announced plans to develop 5,000mw of nuclear capacity in India, and is seeking EOI.
We also published a comment on possible USD refinancing, concluding that current issuance is well behind upcoming maturities. We didn’t have any new supply today.
Best & Worst Performers (zsprd, bp)
Source: Bloomberg
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BONDS: French OAT and Italian BTP are leading Bonds higher
- The push higher in Govies continues to be OAT and BTP led, OAT has been bought in close to 10k in a 5 minutes window, and 5k for the BTP.
- There's hasn't been any obvious trigger, and the moves looks to more order flow related, but Some selling interest is emerging now at the top of the range in OAT and BTP, Bund also starts to fade of its intraday high.
ECB: Lagarde: Energy Prices "Might Have A Real Impact"
Lagarde plays down the need for forward guidance, in line with GC colleagues over the last few weeks (e,g Nagel and de Guindos): “We have a method, we will apply the method, and we will take all the data that comes in. And data is going to be fascinating, as I said, the price of energy is going to be something that might have a real impact”.
- Earlier, when speaking about why the ECB has not cut by 50bps yet, Lagarde pointed the earlier start to the cutting cycle (e.g. compared to the Fed).
EGB SYNDICATION: Spain 10-year Obli: Books open
- Guidance: 3.45% Oct-34 Obli (mid) +8bp area
- Size: EUR benchmark (MNI expects E10-15bln)
- Maturity: 30 April 2035
- Coupon: Short first
- ISIN: ES0000012O67
- Settlement: 29 January 2025 (T+5)
- Bookrunners: BBVA, CACIB, DB (B&D/DM), JPM, MS, SANTANDER
- Timing: Books open, today's business
From market source
