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Bond Market Insights -Mon, 26 Jun 2023

PMI day. Weak PMI's out of Europe had Treasuries bid as the New York market opened, but the release of US PMI erased the whole move. Manufacturing was down 2.1pts, but it was services that the market focused on, down 0.8pts in June. The longer end of the market feels short, which could make the market prone to squeezes and dealers start to flatten off books ahead of the summer break.

US Corporates widened on Friday and are being marked slightly wider again this morning as the market frets over the impact of the Russian situation over the weekend. Volumes remain subdued.

Asia IG credit is opening mostly unchanged, but there is some profit taking evident, particularly in India 10yr and Thai Tier 2s.

The Asia primary market is showing some life. NACF (A1/A+) announced IPTs for a new 5Y @ +135. NACF is rated one notch lower than SHNHAN and CITNAT at Moody’s, but is the same at S&P and will probably trade in line, with a slight new issue concession.

Korea Expressway Corp (HIGHWY), rated Aa2/AA, is touting a 5yr Floater, a sustainable bond to finance projects from the eligible green categories and eligible social categories as set forth in the KEC sustainable finance framework. This is a Formosa deal, listed in Taiwan. Initial Price Talk is +105.

The ECB holds its annual conference this week. They have chosen Sintra, a stunning town on the outskirts of Lisbon, Portugal . Heads of the Fed, ECB, BoJ and BoE will be participating, so we will have a lot of CB commentary to process.


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