Asian bonds soften after Bangkok explosions; Turkey and China oil bonds under pressure

By Christine Van Dusen

Atlanta, Aug. 17 – Asian bonds were softer on Monday on the news of explosions in Bangkok, and notes from Turkey were under pressure during a low-liquidity session for emerging markets assets.

High-grade cash bonds from Asia finished the early session unchanged to 2 basis points wider, a London-based trader said.

“Crude continued to go lower, but China oil [bonds] managed to open unscathed,” he said. “However, post-London open we did see some pressure, and spreads closed a couple basis points wider.”

Bonds from Malaysia moved as much as 8 bps wider, with credit default swaps spreads widening about 7 bps to 180 bps, he said.

“India announced plans to overhaul their public sector banks,” he said. “Equities were up while credit was roughly unchanged.”

From Indonesia, most sovereign cash bonds held in well on Monday morning but the 2024s got “hammered,” another trader said.

“Dealers running light following the buy flow late last week,” he said.

Meanwhile, Turkey’s bond market was under pressure as political uncertainty hurt demand, according to a report from Schildershoven Finance BV.

Looking to Brazil, the bond market continued to grow “as the latest demonstrations were not as big as expected, and as more and more social and business groups have voiced support for the government’s economic course,” Schildershoven said.

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