🔔 At The Bell In Asia: July 2, 2025 – What a Wild Ride! 🔔
When the Bell Rings .. The Beers Sing
Alright, folks, the bell just rang, signaling the end of another whirlwind day in the Asian bond markets! Your favorite (and only slightly frazzled) trader here, ready to spill the beans on what really went down. Grab a cold one, kick back, and let me take you on a journey through the trenches of today's credit trading action. It was a day of high stakes, unexpected twists, and enough new bonds to make your head spin!
☀️ Morning Mayhem: When the Coffee Kicks In (08:00 - 12:00 HKT) ☀️
"Good morning!" I barked into my headset, already feeling the caffeine coursing through my veins. Overnight, the global picture was a bit of a mixed bag – US equities took a breather (even the S&P 500 dipped a tiny bit, gasp!), but Treasuries decided to climb, pushing yields up. My first thought? "Here we go again, another day of trying to figure out if we're going up, down, or sideways!"
Trump's Tariff Tango: The big man himself, President Trump, was still on everyone's lips. He's not "thinking about extending" the July 9th tariff deadline and even threw some shade at Japan over trade imbalances. My desk collectively groaned. "Just tell us if we're getting tariffs or not, Mr. President! My portfolio can't take this suspense!"
Aussie Newbies & Old Favorites: Down Under, Suncorp Bank launched a fresh 1-year Senior MTNs, and Rabobank started sniffing around for a new A$ 5yr note. Meanwhile, our Aussie major bank seniors were already showing a "bid tone" – basically, people were lining up to buy them. I saw traders "hitting and lifting" (buying aggressively) ANZ and Westpac bonds. "More, please!" I thought, as the orders flowed.
Singapore's Steady Hand: Our Lion City credits were their usual reliable selves. "Stat board papers" (government-linked entities) were seeing steady buying, especially on the shorter end. And yes, our darling AIA 3.58 06/11/35 bond continued its hot streak, trading firmly in the 3.27% yield area. Some folks were trying to sell shorter-dated GLC (Government-Linked Company) papers, but the market was like, "Nah, we're good."
The New Bond Buffet Opens! This is where it gets exciting! The primary market was buzzing with new issues:
Qatar Insurance: Kicked off with an Initial Price Thought (IPT) of 6.75% area for their US$ PerpNC6 Tier 2 bond. My inner yield-hunter perked up.
Korea Gas: This Korean energy giant came out with IPTs for a 3Y Floating Rate Note (FRN) at SOFR+105 area and a 5Y Fixed bond at T+85 area. Everyone was crunching numbers to see if it was a steal.
NH Investment & Securities: Another Korean player, launching 3Y and 5Y USD bonds with IPTs of T+130 and T+140 respectively. "More Korean paper? Bring it on!"
Softbank Group: The big whale! Their USD and EUR senior unsecured notes had orderbooks swelling to over US$7.5 BILLION equivalent right out of the gate! This is what we call a "feeding frenzy."
Bright Food (EUR): Even a European sustainable bond from a Chinese food group joined the party, with IPTs at MS+165bps.
Indonesia's Budget Blues (But Bonds Don't Care?): Indonesia's finance minister dropped a bombshell: the 2025 budget deficit would be wider than expected. My screen flashed red, but then I saw the bonds. "Wait, what? They're still holding up?" It seemed the market was more focused on local support and upcoming auctions than a slightly wider deficit.
🍝 Midday Madness: The Drama Unfolds (12:00 - 15:00 HKT) 🍝
"Lunch? What's lunch?" I muttered, glued to my screens. The market was a rollercoaster, and I was strapped in!
JOLTS Jumps, Yields Follow: The US JOLTS (Job Openings and Labor Turnover Survey) report came out, showing job openings surged to a 6-month high. My first thought: "Oh, snap, tight labor market! No rate cuts for you!" And just like that, Treasury yields spiked, especially on the shorter end. "See? This is why I have grey hairs!"
Asia's Resilience: Despite the US yield jump, Asia's credit markets were surprisingly resilient. "It's like they're in their own little bubble," I mused.
China/HK: Overall firm, but some "better selling" in front-end bonds. MTRC perps were doing their own thing, with the 4.875% perp down 2 cents, but the 5.65% perp up 10 cents! "Classic market divergence," I scribbled.
Korea: Busy with new issues, but bank books were buying short-end bonds after the overnight rate sell-off.
India HY: Still hot! Vedanta bonds were getting "lifted" (bought aggressively), and even with some profit-taking, the bids were juicy. "These guys just can't get enough!"
SEA IG: The rally continued, with spreads tightening even further. "It's getting harder to find anything cheap out here!"
The Sovereign Dance: In the sovereign space, Sri Lanka was a mixed bag, with sellers on the 30-year but buyers on the rest of the curve. Mongolia was getting "lifted," and the Philippines/Indonesia bonds were also seeing strong buying. "Everyone's got their favorites today."
New Issue Overload (The Feeding Frenzy Continues):
Softbank Group: Their orderbook just kept growing, hitting over US$10 BILLION equivalent! "This is going to be a monster deal!"
Korea Gas: Their books swelled to over US$4.6 BILLION!
NH Investment & Securities: Not far behind, with books over US$3.1 BILLION!
Bright Food (EUR): Their sustainable notes were also attracting serious attention, with books over EUR2.6 BILLION.
Qatar Insurance: Their Tier 2 bond books hit over $1.5 BILLION. "It's like a bond-buying competition out there!"
🌆 Afternoon Action: The Final Sprint (15:00 - Close HKT) 🌆
"Almost there!" I thought, as the last few hours of trading began. The market mood was still generally firm, but some profit-taking started to creep in, like a gentle summer shower.
Softbank Group's Grand Finale: The orderbook for Softbank Group's new bonds soared past US$12.5 BILLION! Asia books were "subject" (meaning orders were locked in), and everyone was waiting for the final pricing from New York. "This is going to be one for the history books!"
Korea Gas & NHIS Lock It In: Korea Gas's books hit over US7 BILLION, and NH Investment & Securities' combined books reached over US7.1 BILLION! Both also went "Asia book subject," setting the stage for pricing. NHIS even released its final price guidance, tightening significantly from its initial thoughts. "That's what happens when demand is off the charts!"
MTRC Perps Diverge: The MTRC perps continued their odd dance. The 4.875% perp got "hit" (sold) and closed slightly lower, while the 5.625% perp was still holding strong. "Sometimes, even similar bonds have different personalities."
SGD's Risk-On Party: Singapore Dollar credits had a "risk-on session." My desk saw "better buying" in bank capital (AT1s, Tier 2s) and high-beta corporates. Even with SORA rates ticking up, the demand was insatiable. "They're just hungry for yield!"
Malaysia's Quiet Strength: Malaysian bond yields continued their "slow and steady grind lower," shrugging off higher US rates. The Ringgit also kept strengthening. "My Malaysian colleagues are probably doing a happy dance right now."
Indonesia's Choppy Waters: INDOGB chopped sideways. Yields were a bit cheaper (+1 to +2 bps) due to some profit-taking, but local banks were still providing "support bids." "It's like a tug-of-war, but the locals have a strong rope!"
Sri Lanka's Comeback Kid: Sri Lanka bonds continued their rally, gaining another 0.5 points, with strong buying in the 33-year and 38-year maturities. "Who knew Sri Lanka would be the comeback kid of the week?"
Trader's Takeaway: What I Saw Today
Phew! What a day. Today felt like a giant game of "musical chairs" for bonds. Money was flowing into new issues at an incredible pace, showing that investors are hungry for fresh paper from quality names, even if the broader market is taking a breather. The sheer size of the orderbooks for Softbank, Korea Gas, and NHIS tells you everything you need to know: liquidity is ample, and demand for good credit is insatiable.
I also saw a clear divergence: while US rates were trying to climb, Asian credit spreads were largely holding firm or even tightening. It's like Asia's saying, "We've got our own party going on here, thanks!" The political noise in Thailand caused a ripple, but the market seemed to absorb it relatively well. Overall, a "risk-on" day, with a lot of money chasing yield and quality. My hands are tired from all the clicks, but my brain is buzzing!
Tomorrow's Crystal Ball: July 3, 2025 Preview
Get ready for another interesting one!
US ADP Employment Report: This is the big one for the US tomorrow. After the JOLTS surprise, everyone's watching this for clues on the labor market. A strong number could push US yields higher, which might make our Asian bonds feel a little less shiny.
ECB Forum Concludes: The European Central Bank's big conference in Sintra wraps up. More central bank speeches mean more potential headlines about interest rates and inflation.
Australia Retail Sales & Building Approvals: Key local data for our Aussie friends.
New Issue Pipeline: Expect more new bonds to hit the market, especially from Australia (NZGB, Rabobank). The "feeding frenzy" might continue!
Trump's Tariff Talk: The July 9th deadline is looming. Any new comments from President Trump could send ripples.
My Top Trade Ideas for Tomorrow: Play Like a Pro!
Here are some ideas I'm eyeing for tomorrow, based on today's action. Remember, this is my view, not financial advice – always do your own homework!
Korea Gas (KORGAS) 5Y Fixed Bond – The Blue-Chip Bargain Hunter!
Rationale: This is a top-rated, strategically important Korean energy company. Their new 5Y bond saw massive demand today (books over $7BN!). The IPTs offered a decent spread compared to peers, and final pricing is expected to be tight, but still potentially attractive given its quality and the sheer demand.
Simple Explanation: This is like buying a super reliable car brand's new model at a discount. Lots of people want it, and it's a safe bet, so even if the price goes up a bit, it could still be a good deal.
Catalyst: Final pricing coming in at the tighter end of guidance (or even inside) due to overwhelming demand. Continued strong performance in other Korean new issues.
Invalidation Catalyst: Pricing comes much tighter than expected (eroding value), or a sudden global "risk-off" mood that hits all new issues.
NH Investment & Securities (NHSECS) 5Y Bond – The Korean Securities Steal!
Rationale: Another high-quality Korean issuer with strong backing from its parent financial group. Their new 5Y bond also saw huge demand (books over $7.1BN!) and tightened significantly on final guidance. This indicates strong market confidence in the issuer and potentially attractive pricing relative to its peers.
Simple Explanation: This is like getting a premium ticket to a popular concert at a good price because of its strong connections. People are lining up, and the final price looks better than expected, so it could be a smart buy.
Catalyst: Continued strong performance in the Korean financial sector. Positive investor sentiment towards well-backed securities firms.
Invalidation Catalyst: Unexpected negative news on the Korean financial sector, or if the bond trades significantly wider than final guidance on initial secondary trading.
Qatar Insurance Company (QIC) PerpNC6 Tier 2 Bond – The Yield Hunter's Gem!
Rationale: This Middle Eastern insurer is offering a Perpetual Non-Call 6-year Tier 2 bond with an attractive IPT of 6.75% area. While it's a perpetual (meaning no fixed maturity), the first call date is in 6 years, and the yield is compelling, especially when compared to other AT1s in the region. Books already over $1.5BN!
Simple Explanation: This is a bond that pays a really high interest rate, and while it doesn't have a fixed end date, the company can buy it back in 6 years. It's offering a juicy yield compared to other similar bonds, making it attractive for those looking for higher income.
Catalyst: Pricing comes in at the IPT or only slightly tighter, maintaining the attractive yield. Continued strong demand for high-yielding financial bonds.
Invalidation Catalyst: Pricing comes much tighter than 6.60% (as per Nomura's FV), eroding the yield pickup. Any unexpected geopolitical tensions in the Middle East or specific negative news on the insurance sector.
Sri Lanka Bonds (SRILAN 33s & 38s) – The Comeback Kids (Still)!
Rationale: These bonds continued their rally today, gaining another 0.5 points, with strong buying interest in the longer-dated maturities. This suggests ongoing positive momentum as the country's debt situation improves.
Simple Explanation: Sri Lanka's economy is getting better, and investors are finally starting to believe in their bonds again, especially the longer-term ones. If this positive trend continues, these bonds could keep climbing.
Catalyst: Further positive news on Sri Lanka's economic recovery or IMF program. Continued "risk-on" sentiment globally that benefits emerging markets.
Invalidation Catalyst: Any unexpected political instability or a slowdown in economic reforms that derails the recovery narrative.
Disclaimer: This is your trader's honest take, not financial advice! The bond market is a beast, and it can bite. Always do your own research, understand the risks, and consult a financial pro before you put your hard-earned cash on the line. Now, go get 'em!