December started on a weak tone with IG spreads 2-3bps wider, reacting to the recent moves in UST’s. Short end China SOE’s were in demand and lifers nibbled at the long duration bonds. India and Korea both felt heavy. Following the abrupt u-turn in markets in New York there was more selling of low beta IG bonds which is weighing on the market this morning. China HY was 1-3pts lower yesterday, fast money selling being countered by demand from private bank and real money. Agile, Zhenro Properties, Yuzhou and Aoyuan were the most out of favour. #bonds
Extensions are in the news today as Oceanwide Holdings seeks to extend the tenor of CNY 6.8bn in loans from China Minsheng Bank and Fujian Yango
fails to obtain noteholder approval to extend CNY400mm of notes. Kaisa will announce today whether creditors have agreed to a debt swap which extends the KAISAG 6 ½ 12/07/21 by 18 months. If the 95% approval is not reached the company might have to consider debt restructuring. They currently have US$11.6bn of dollar debt outstanding. #debtrestructuring
Away from disease and pestilence the focus is likely to be the two-day OPEC+ expected decision on whether to go ahead with the previously planned 400kbpd increase in output or hit pause because of new risks. The latter is seen as more likely, an increase could push oil and related markets like energy equity sub-indices and petro-currencies into a bit of a tailspin. In U.S. tonight brings claims and some Fed Speak and then the market will be waiting for Payroll Friday.