ASIA CREDIT CLOSE: Markets hold breath for US data

Fri Feb 7, 2014 5:28am EST

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HONG KONG, Feb 7 (IFR) - Trading in Asian credits was relatively subdued on Friday as real-money investors sat on the sidelines ahead of the release of US unemployment data later this evening.

The iTraxx Asia ex-Japan IG Index tightened 1bp to 145bp/147bp from yesterday's close after US equities ended higher overnight.

"If non-farm payrolls don't really surprise badly to the downside, then we'll see markets continue to rally," according to a Singapore-based trader.

Trading in new issues, such as those from Korea Midland Power and Korea Gas, weakened in the morning trading sessions, but received a boost in the afternoon from local investors. The Korea Midland 2018s were last quoted at 132bp/127bp over US Treasuries, while the KoGas 2024s were seen at 121bp/119bp over US Treasuries.

An improvement in risk appetite helped buoy Asian equities across the board and drove Indian and Korean bank bonds tighter. Five-year Indian bank paper tightened about 5bp, while investors bought Korean bank paper in the 2017s and 2018s, according to a Hong Kong-based trader.

Non-farm payrolls are expected to have risen by 185,000 last month, according to a Reuters' poll of economists, after unseasonably cold weather in December limited gains to 74,000.

frances.yoon@thomsonreuters.com

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