HONG KONG, April 4 (IFR) - Asian credit markets saw light trading as investors waited on the sidelines for US payroll results, which are expected to show that the US economic recovery is on track.
The Asia ex-Japan IG iTraxx index was unchanged today at 124bp/126bp ahead of the key employment release.
March payroll data is expected to provide evidence that recent weather-related weakness in US the economy has passed. Economists forecast job gains of 200,000 jobs in March, according to a Reuters poll, though dealers say the whisper number in markets is now something nearer 220,000.
New issues continued to tighten. Sinopec's USD5bn five-tranche bond, one of the biggest dollar bonds issued by an Asian corporate, continued to gain on the short and long end of the curve.
The new 2017s tightened the most, and the 2024s were firm, but the fixed 5-year bonds widened 1bp on views that the tranche was priced too tight, according to a Singapore-based trader.
Siam Commercial Bank, the first Thailand issuer to tap the US dollar bond market this year, also saw its new issues tighten 2bp to 172bp/179bp amid limited supply from the country.
China's CDS widened to 92bp as investors became concerned that plans to shore up the economy that were announced on April 2 were not sufficient to help the country meet its 7.5% growth target for 2014.
PRC property developers also weakened in secondary trading amid doubts that local Chinese governments would be able to implement policies to promote the property market, according to another trader. Country Garden's new 2021s dropped half a point to 93.5/94.5 on a cash price basis.
Traders said new bonds that are expected to price on Monday and Tuesday will set the tone for the market next week, along with US Federal Reserve minutes and China trade data.
One trader said that expected weakness could drive the Markit iTraxx Asia ex-Japan IG index wider to 128bp.