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Bond Market Insights - Wed, Mar 23 2022

Updated: Mar 31, 2022

The moves in US Treasuries are central to sentiment currently and closed Tuesday’s session lower and a tad steeper, price action being calmer after Monday's aggressive sell-off. USTs are 3-8bps cheaper across the curve and 10yrs close the NY session at 2.38%. 5/30s trading 21bps from 17.3 in Asia time. There was another heavy slate of US corporate issuance which weighed on the market with 8 deals totalling $10.5bln, led by Lowe's 4-part deal.

Fed's Bullard continued the hawkish rhetoric stating more aggressive and faster hikes are appropriate and he'd like to see 300bps this year. Today's calendar includes New Home Sales, $16bln 20yr Auction, Fed's Powell, Daly & Bullard.

China IG Corps remain robust and were as much as 8bps tighter. The TMT sector led the way, absorbing the continued supply from US accounts as Alibaba begins share buybacks. Chinese and global money was bottom fishing for 5-10yr low beta names.

China HY opened weak following the headlines of delays in yearly results for the likes of Sunac and Shimao. HY property bonds eventually closed 1-2 pts lower with some good buying into the weakness. This morning Roadking bonds are being marked 5pts higher on buying from real money, funds and private banks following the release of financials for the year

Asia sovereigns were hit by Sovereign Wealth Fund and real money selling, down by as much as 2.5pts in the long end. The new Philippines 3-tranche issue was priced at a discount to seasoned bonds, particularly for the 5 and 10yr, where locals looked to add paper. The 30y was better offered through the day, as USTs kept drifting lower. Secondary bonds were 5-8bps wider. India IG continued to trade with a firm tone, but dealers were prepared to offload risk at offer side.

Thai Banks got downgraded by S&P and AT1s were marked down -1pt. There was some selling from real money and hedge funds of the squeezed Bangkok Bank and Kasikornbank perps, retail was still on the buy side. The Thai PTT Global Chemical (Baa2) announced a new issue mandate, potentially 10y and 30y, which had little impact on the secondary market. The new KDB guaranteed Hyundai Heavy Industries 27’s saw little top up demand from accounts and slid from a tight of T+86 to T+95.


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