This is Sales & Trading Commentary and not research, views expressed may differ from UBS Research

Morning,

News Highlights

  • REDD: E-House expects offshore debt revamp to become effective by 31 March
  • REDD: Meituan to buy back up to USD 1bn of stock in show of confidence
  • DW: China Jinmao gets clearance from Shanghai bourse, CSRC for proposed mall-backed REIT registration, listing
  • DW: JSW Steel pays penalty imposed on erstwhile JISPL by RBI for delay in regulatory filing
  • REDD: Mongolia accepts for purchase USD 222.8m in tender offer for 8.75% notes due 2024
  • DW: China Vanke proposes up to CNY 1.435bn CMBS offering to repay debts, boost working capital

Overnight Macro Wrap

UST yields fell overnight following remarks from Fed Governor Christopher Waller. Waller stated he is “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%”. The front-end and belly led the positive reaction to the comments and outperformed.

The 2yr closed -12bps to 4.73%, the 10yr -7bps to 4.32%, and the 30yr -3bps to 4.51%. 2s10s lessened the inversion by nearly 9bps, closing -41.5bps.

Equities showed strength while investors absorbed the hawkish Fed commentary and the Consumer Confidence measure’s first increase in four months (SPX: +0.10%, 4,555 | DJIA: +0.24%, 35,417 | NDAQ: +0.29%, 14,282)

Asia Flow Credit Flow Update

  • Asia IG/Crossover –

China IG property space took a pause and softened yesterday as the higher cash names like CHJMAO, VNKRLE and LNGFOR fell 2-3pts with FM selling and RM sidelined on adding risks. In HK space, NWDEVL curve was skewed to better selling from FM And retail accounts. HYSAN and LIFUNG were also better offered.

China TMT space was pretty muted yesterday, with levels closed unchanged to 1bp wider. Post overnight rates rally, global accounts kept outflow on both benchmark and BBB names, while onshore buying took a pause. Japan space closed roughly unchanged with retail accounts remained better buyers. Insurance papers traded up upon rates rally, with PB/Funds better buying.

  • Asia HY/Non-China Credit –
    In HY property space, the beta names also weakened with FTLNHD closing 2pts lower and DALWAN closing unchanged to 50c lower. The rest of the property names like SHUION and YLLGSP saw light flows, closing unchanged on the day.

Non-China space was roughly unchanged yesterday despite rates rallying overnight. Flows were skewed to better selling, especially on the long end papers. Indo names such as MINCAP/LLPLCA were hit on the street. Rest of the space was pretty quiet.

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Sean Aw

UBS AG, Singapore

Credit Sales

9 Penang Road

Singapore 238459

+65 64953298

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