Asian investment-grade credits were better bid ahead of tonight’s U.S. nonfarm payrolls announcement, but activity remained light as traders waited for clues on the Federal Reserve’s plans to raise interest rates.
Sinopec and CNOOC’s 2020s were 3bp tighter, while Pertamina’s 2044s rose half a point. Huarong Finance’s 2020s were 6bp tighter at T+237bp, while Bharti Airtel’s 2025s narrowed 9bp to T+224bp.
ICICI’s 3.125% 2020s, which saw spreads widen in the past two weeks, also stabilized at the 184bp level.
Petronas’ 2019s and 2025s were unchanged since Wednesday at 180bp/170bp and 125bp/120bp respectively, despite a warning from Fitch that it could restore its negative outlook due to a drop in the Malaysian ringgit, falling foreign exchange reserves and shrinking current account surplus.
“It would be a gamble to trade today,” said a Singapore-based trader. “Any signal either way could push the markets in a big way next week.”
Encouraging U.S. economic data could give the Fed the confidence to raise benchmark overnight rates during its next policy meeting on Sept. 16-17.
A Reuters survey of economists showed payrolls are expected to have risen by 220,000 last month, up from 215,000 new jobs in July.
The unemployment rate is also forecast to have dropped to 5.2%, which would be the lowest level in more than seven years, according to the poll.
Asian high-yield bonds were mostly unchanged as China was closed today for a National Holiday. Maoye’s 2017s were down a third of a point to 94.9.
Asian investment-grade CDS hovered near its highest level since March 2014, and was last bid at 138bp. (Reporting by Frances Yoon; Editing by Vincent Baby)