SINGAPORE, July 9 (IFR) - Buying interest is picking up
momentum to such an extent that even bonds that had been lagging
in recent trading sessions have started to find bids.
Traders in Singapore said they saw better buying across the
board today as investors started to feel that Treasury yields
might have reached a plateau and found a new trading range.
"Accounts seem to be getting comfortable about owning risk at
the current absolute yields," said one trader in Singapore.
Buying interest remained mostly focused on high-quality more
liquid bonds, such as those from Chinese state-owned oil and gas
companies, which ended the session 10bp tighter on average.
Other better-rated bonds were also in demand and KDB's 2022s
closed the session quoted at 132bp, 10bp tighter than where they
had closed yesterday.
Traders also saw some nibbling at the less-liquid and
lower-quality Single A names and the 2018s of Daegu Bank and
Vanke were finishing the session 10bp tighter quoted at 205bp
and 220bp, respectively, mid-market.
Still, sovereign bonds did not see much action and were
moving in tandem with Treasuries. Spreads for the most traded
names were mostly unchanged as was the Asia iTraxx IG index,
last quoted at 155bp.
High-yield found subdued interest, as well. Private-banking
accounts were picking up some of the shorter-dated bonds, such
as Evergrande 2015s, which ended the session quoted at
102.00/103.00, USD1.5 stronger than where they were last week.
In spite of the upbeat mood, desks were cautious. One trader
said that actual trading was very thin and that less than USD2m
had crossed his desk the whole day. "It is only coming in drips
and drabs," said an analyst in Singapore.
Given the illiquidity, desks remained defensive. "It only
takes one big account to start selling and the whole thing will
collapse," said one trader.