ASIA CREDIT CLOSE: Spreads tighten as IG outperforms UST

Last Updated: Mon, May 06, 2013 09:10 hrs

SINGAPORE, May 6 (IFR) - Asian credit was tighter on Monday, partly due to Friday's US Treasury sell-off in response to stronger-than-expected non-farm payroll data for April, which pushed 10-year yields up 12bp.

High-yield is around 50ct higher on average, while the long offshore sovereign curves are between USD1 and USD2 weaker in price terms, but still outperforming Treasuries. The iTraxx IG index is 4bp tighter at 100bp/102bp.

The Philippines 2037s are off USD2 at 120.75 bid, while the recently issued Indonesia 2043s are off USD1.5 at 103.00 bid.

Following the victory of the ruling coalition in the weekend Malaysian general election, Malaysian 5-year CDS tightened 7bp to 74bp/77bp, with the benchmark Petronas 2022s around 2bp tighter at Treasuries plus 110bp/100bp in the context of light flow.

Meanwhile, China property was up around 50ct in price, with decent April sales data keeping the bid for the sector humming along.

Friday's barnstorming performance from the China oil major sector failed to reverse, with the recent issuance from CNOOC tightening even further from the 15bp or so contraction seen that day. The new 2043s are 6bp tighter at Treasuries plus 133bp/128bp and the 2023s are 5bp tighter at plus 140bp/135bp.

In a data-light week from the US, the focus will be on China numbers, with CPI, export and lending data due for release this week and likely to set the short-term tone for Asian offshore secondary credit.

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