SINGAPORE, Jul 17 (IFR) - Asian credit markets were quiet for the most part ahead of Ben Bernanke’s congressional testimony later today, with many participants expecting further dovish comments to strengthen the recovery in sentiment that kicked off last week.
If there was any theme to today’s price action, it was the continued weakness of India credit, with yesterday’s liquidity lightening stemming from the RBI’s putting the spotlight on the country’s banks and pushing spreads out further.
So, the ICICI 2020s are 5bp wider on the day at Treasuries plus 255bp bid, as are the 2018s at plus 270bp. The Reliance 2022s are out 3bp at plus 227bp.
“There was some profit taking here and there, but it’s generally very quiet. It’s okay to see some scale-back after the recent rally,” said a Singapore-based trader. The iTraxx IG index is looking to close out 1bp wider at 137bp/140bp, with little in the way of new positions established ahead of Bernanke.
There was a bit of scrappy action on China SOE paper, which is still looking to establish a base of support after the sell-off of the past month or so.
The CNOOC 2023s are closing out 2bp wider at Treasuries plus 162bp bid, while the Sinopec 2023s are flat at plus 165bp.
Bargain hunting in China property counters is starting to emerge, albeit with a degree of caution regarding China headline risk. The bellwether Country Garden 2023s are up a quarter at 93.25 bid, while the Soho China 2022s are up a half at 91.5 bid.