For global credits, last week began with a risk-off move, following renewed geopolitical tensions coming out of the Middle East. Investors started demanding higher yields on US Treasuries, which was exacerbated after the US Supreme Court rejected President Donald Trump’s tariff proposal. Following this, profit-taking began for global credits. Bonds across tenors sold off, while short-term papers continued to see some buying interest. Over the weekend, more headlines of a US and Israel attack against Iran and the latter’s subsequent retaliation resulted in a selloff of assets across the region. Asia sovereign spreads are now 5 to 9 basis points (bps) wider, while Asia corporate spreads are 5 to 10 bps wider. Middle East clearly underperformed by an extra 10 basis wider for riskier and longer-dated bonds. On the other hand, credit default swap spreads are around 3 bps tighter to 6 bps wider.

• The US initial jobless claims for the week ending Feb. 21 came in higher than expected at 212,000 versus 217,000 in a Bloomberg Survey.
• The US Core Producer Price Index printed higher than expected at 0.8% month-on-month in January versus 0.3% in a Bloomberg Survey.
• The Chicago Purchasing Managers’ Index rose to 57.7 month-on-month in February versus 54.0 in January. A reading above 80 indicates manufacturing expansion, while below 50 points to a contraction.