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Bond Market Insights - Fri, 10 Feb 2023

US Jobless claims were up. Initial claims up 13k to 196k and continuing claims up 33k to 1688k, both higher than expected, although continuing claims remain below December levels. The next big data point is US CPI next week, which could be the catalyst for the 10y yield to push towards 4% again. The 30yr auction tailed 3.2bps and weighed on the rest of the market. Dealers took 15.8% of the issued amount, well above last month's 9%.

The Chinese overnight repo rate, an indicator of short-term borrowing costs in the interbank market, slumped more than 40 basis points to 1.86% today as the PBOC injected a net 180 billion yuan ($26.5 billion) via seven-day reverse repo’s, taking the total amount to more than 1 trillion yuan in three days.

Asia has opened a couple of bps wider again, flows remain muted. China property is also soft with Country Garden down another 1-2 points in price. HY is down 0.5-1pt in general.

The MSCI review of the free float of shares for the Adani Group will result in lower weightings for 4 Adani companies including Adani Enterprises and Adani Transmission. The review raises concerns about offshore shell companies and funds tied to Adani being the largest “non-insider” holders of Adani shares.

SriLankan Airlines has defaulted on the US$175mm government guaranteed SRAILT 7 06/25/24, missing a US$6mm coupon payment. Noteworthy, but not a surprise following the default on US$ sovereign debt in May last year.


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