Global credits traded with a mixed tone over the week, as markets continued to absorb new issuances, most notably the new 5- and 10-year Perusahaan Listrik Negara PT (PLNIJ) US-denominated bonds. The announcement early in the week placed pressure on its sovereign counterpart, resulting in spreads widening by around 2 basis points (bps). Meanwhile, Indonesian (INDON) sovereign bonds continued to feel heavy midweek, following global investment services provider MSCI’s warning that Indonesia may be removed from its Emerging Markets benchmark. Credit spreads remained relatively tight, widening only about 2 bps on the headline, while Republic of the Philippine (ROP) sovereign bonds widened slightly after a weaker-than-expected Gross Domestic Product data for the fourth quarter. For the week, INDON bonds closed roughly 4 to 8 bps wider, while ROP bonds were unchanged to 2 bps tighter. Asian investment-grade (IG) corporate papers also traded with a mixed tone. Korea IG bonds started the week quietly, but gradually tightened by about 3 bps as sentiment improved. Thailand IG bonds followed a similar path, led by increased activity in bank names. In the retail space, both Qualified Investor Buyers and Non-Qualified Investor Buyers papers saw steady client interest, particularly in higher-quality issuers. Investors continued to add familiar names such as Hyundai Motor Company, BDO Unibank Inc., and Manila Water Company Inc., with a preference for short- to medium-term tenors.

• The US Federal Reserve maintained their policy rate at 3.50%-3.75%.
• The US Unemployment Claims for the week ending Jan. 24 came higher than expected at 209,000 vs 206,000 in a Bloomberg Survey.
• The US Producer Price Index for December came in higher than expected at 0.5% month-on-month versus 0.2% in a Bloomberg Survey.
• The US Core Producer Price Index for December came in higher than expected at 0.7% month-on-month versus 0.2% in a Bloomberg Survey.