- The Unemployment Claims came out at 231k, which is below market expectations of 232k.
- The US Preliminary GDP Growth for Q2 is at 3.0%, which is above market expectations of 2.8%.
- The US Core PCE Index for Q2 is at 2.5%, which is below market expectations of 2.6%.
- Markets decreased rate cut expectations with 3.8 cuts priced in for 2024 compared to 4.1 cuts in August 27.
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As of September 11, 2024
What to watch out for next?
What happened the past week? (Aug 27–Sept 2)
Asia Investment Grade (IG) Credits traded range bound last week amid the lack of catalysts and light trading. Sentiment was generally firm after higher US 2nd quarter Gross Domestic Product (GDP) revisions and an in-line Core Personal Consumption Expenditures (PCE) print. For sovereigns, highlight of the week was the Republic of the Philippines (ROP) primary issuance. ROP priced 5.5Y, 10.5Y, and 25Y bonds at +75, +95, and 5.175%, respectively.
Off-the-run ROP papers underperformed after the new issue announcement, widening by as much as 5-7 bps week-on-week. ROP new issues closed the week unchanged at 1bp tighter with the 25Y bond outperforming. Indonesian sovereign bonds (INDONs) traded range-bound with 10Y bonds unchanged in spread week-on-week. ROP and INDON 5Y CDS are 1-2 bps wider at +58 and +68, respectively.
What to watch out for next?
What to watch out for next?
What happened the past week? (Aug 27–Sept 2)
Asia Investment Grade (IG) Credits traded range bound last week amid the lack of catalysts and light trading. Sentiment was generally firm after higher US 2nd quarter Gross Domestic Product (GDP) revisions and an in-line Core Personal Consumption Expenditures (PCE) print. For sovereigns, highlight of the week was the Republic of the Philippines (ROP) primary issuance. ROP priced 5.5Y, 10.5Y, and 25Y bonds at +75, +95, and 5.175%, respectively.
Off-the-run ROP papers underperformed after the new issue announcement, widening by as much as 5-7 bps week-on-week. ROP new issues closed the week unchanged at 1bp tighter with the 25Y bond outperforming. Indonesian sovereign bonds (INDONs) traded range-bound with 10Y bonds unchanged in spread week-on-week. ROP and INDON 5Y CDS are 1-2 bps wider at +58 and +68, respectively.
- The Unemployment Claims came out at 231k, which is below market expectations of 232k.
- The US Preliminary GDP Growth for Q2 is at 3.0%, which is above market expectations of 2.8%.
- The US Core PCE Index for Q2 is at 2.5%, which is below market expectations of 2.6%.
- Markets decreased rate cut expectations with 3.8 cuts priced in for 2024 compared to 4.1 cuts in August 27.
What to watch out for next?
What to watch out for next?
For the week ahead, jobs data on Friday will be the main focus. JOLTS Job Openings, and ADP Employment Change will also set expectations for the Friday print.
What to watch out for next?
Outlook
We still remain neutral on duration and still looking to pick up credits on dips. We maintain a constructive outlook on the belly and short-term front-end segments of the yield curve. For the EM corporates, we still have a positive outlook on EM issuers in the medium term as the US Fed starts its easing cycle. However, in the near term, we are seeing some consolidation on the back of heavy new issues pipeline.
What to watch out for next?
