Asia Credit Watch:Market Highlights

Market Commentary

    Asian credits were mixed as HY were firm while IG mostly unchanged. Asian equitiesretreated led by Hong Kong and Japanese shares post Fed's minutes, which sendenough dovish signals causing yen to strengthen. Meanwhile, investors shifted focus tocorporate earnings as concerns rose that gains from equities have been excessive.

    Among the economic data releases, US MBA mortgage applications as of February-17fell 2.0% compared to a decline of 3.7% earlier. Existing home sales recorded anincrease of 3.3% MoM (cons: 1.1%, prev: -2.8%) in January. In Asia, Bank of Koreakept the 7-Day repo rate unchanged at 1.25% (cons & prev: 1.25%) as of February-23.

    Singapore's CPI came in line with expectations and rose 0.6% YoY (cons: 0.6%, prev:0.2%) in January, while Macau's visitor arrivals for January rose marginally to 2,876tnfrom 2,814tn earlier. Further, we revised our 10Y UST forecasts to 2.4% from 2.25%earlier for end-2017 amidst an improving global outlook. IG corps were mostlyunchanged with little activity. The new 5-year CHJMAO'22 traded at 176/174bps, frompriced level of 170bps. HY corps started on a firm tone today. Chinese property wereunchanged to marginally up as demands for yields came in. New XINHUZ'21 closedc1.0pts up before mid-day after reaching a high of c1.5pts. Chinese industrialswitnessed mixed flows; retail sellers pushed MIEHOL'18 and '19 c0.25-0.5pts lower.

    Indonesian names rose 0.125-0.25pts on average. In India, VEDLNs gained anotherc0.125pts and demands for yielding names like GCX and RCOMIN were seen.