The Asian credit market saw two-way activity last week, influenced by several new factors like US inflation data, tariff news, and economic growth challenges. Sovereign credit spreads broadly tracked the moves in US Treasury yields, which skyrocketed following a hotter-than-expected US Consumer Price Index print. However, they quickly fell back as US Retail Sales were reported lower than expected. Overall, US Treasury yields barely changed week-on-week, despite trading within a 20-basis point (bp) range. Despite the volatility, credit spreads shrugged off the swings, narrowing by 3 to 7 bps. All-in yield buyers were seen putting cash to work, especially when benchmark yields increased. Bonds in the 5- to 10-Year space saw the most narrowing in spreads, while longer-term bonds had mixed results.

• The US Retail Sales Advance printed lower than expected at -0.9% versus a market estimate of -0.2% month-on-month.
• The US Industrial Production reported higher than expected at 0.5% versus a market estimate of 0.3% month-on-month.