SINGAPORE, Jan 28 (IFR) - Trading was muted in the Asia session, with light two-way flow and recent China property names continued to bear the brunt of the supply overhang, with last week's price rout failing to find value hunters in any meaningful way.
As a measure of the market's light flow, the iTraxx IG index is looking to end the day unchanged at 106bp/107bp.
The Treasury sell-off which emerged on Friday thanks to bullish comments from the Davos economic forum on the state of global growth, together with an unexpected high volume of early LTRO payments by European banks has been positive for Asian credit spreads, albeit in the context of broadly unchanged secondary dollar bond prices.
In single name CDS most counters were unchanged with the exception of Thailand, which tightened 3bp to 87bp/95bp, with the wide bid/offer spread also telegraphing the market's illiquid state.
The recently issued Agile perp traded up a quarter from this morning's low 94.5 low print, as did the Future Land, which were last at 98.25, while the new Powerlong shed a quarter to 94.5 bid.
Investment grade paper has been solid, as shown by the holding on to its initial tightening after pricing last week of the new Shinhan Bank 5.5-year, which are closing out at 126bp/124bp.
Treasuries are likely to dominate the input into Asian credit in the short term, with the key 1.95% level on the 10-year seen as crucial support, beyond which the 2% barrier beckons and which could be breached via a yield spike. In these circumstances the recent solidity of Asian credit spreads might be put to the test.