HONG KONG, Aug 22 (IFR) - Asian bond markets continued to tighten slightly as global central bankers prepare to gather for Thursday’s closely watched meeting in Jackson Hole, Wyoming.
Some recent comments from members of the US Federal Reserve have led to considerable speculation of rates being raised as early as next month. The FOMC’s next meeting is scheduled for September 20-21.
A weak session in the US on Friday did not seem to have much of an impact on bonds. Volumes were lighter due to the usual summer lull in activity, but the bid for Asian credit remained intact.
Analysts at MUFG Securities said emerging-market credit funds saw inflows of US$1.5bn last week.
Investment-grade traders said there were no drastic movers on the day, but sentiment remained constructive. The iTraxx Asia IG ex-Japan was spotted just over 1bp tighter at 110.25/112.00.
In the high-yield segment, Chinalco’s recently issued US dollar 2021s were unchanged as were HNA Group’s 2019s.
Despite the stable sentiment in credit, a number of recent issues stumbled slightly on the day. Yields on Adani Transmission’s 2026s widened 3bp, while spreads on ICBC Singapore’s 2019s were 2bp wider.
Prospects of interest rate hikes appeared to rattle the equity markets more with indices spending most of the session on the back foot. Stocks in Hong Kong and Shanghai were both down around 0.5% in the early afternoon.
Reporting By Spencer Anderson; editing by Dharsan Singh