20240112-招银国际-Fixed_Income_Daily_Market_Update_6页_902kb

Fixed Income Market Summary - January 12, 2024

Market Overview

The market began firm this morning following a decline in U.S. Treasuries yields, despite a CPI rebound. Buyers showed preference for High-beta IG and high-yielding LGFVs, with few short-dated bonds switched at rich yields.

Issuance Data

• Asia ex-JP USD bond gross issuance in 2023 decreased 175% YoY to $1.324 trillion.
• Chinese IGs dominated December 2023 issuance, accounting for 73% of total.

Trading Highlights

• Key bond movements: ROADKG notes up 05-07 pts, KMRLGP down 15 pts, EHICAR’s 24/26 notes rose 25 pts.
• Onshore and offshore transactions included LGFV bond early redemptions and restructuring activities.

Macro News

• U.S. Dec 2023 CPI at +3.4% YoY (higher than expected +3.2%), with jobless claims lower than expected.
• China Dec 2023 CPI/PPI at -0.3%/-2.7% (lower than expected).
• U.S. Treasuries retreated, with yields decreasing.

Regulatory and Policy Updates

• Chinese government tightened measures to address local debt risks, including RRR/LPR cuts and issuance of special refinancing bonds.
• Offshore LGFV financing restricted, limiting shorter-term bond issuance.

Recommendations

Prioritize LGFVs with strong funding access, such as CCUDIH, CPDEV, GSHIAV, for favorable risk-return profiles.