Treasuries, Greece deadline make investors risk-averse; some Asian names still tighten

By Christine Van Dusen

Atlanta, May 11 – As U.S. Treasury yields on Monday rose to their highest level since December, bonds from throughout the euro zone saw a sell-off, a situation exacerbated by the continued instability in Greece.

“A whole pot of issues on the boil for the market this week,” a London-based trader said. “It seems likely that the IMF will get its [repayment] tomorrow, but the mood music is angry in Athens and probably no better in Brussels.”

So the tone for trading was anti-risk, he said.

“The big question is how duration softens in a somewhat quiet data week,” he said.

Despite all this, Asian bonds managed to start the week on firm footing, with high-grade cash bonds tightening between 1 basis point and 3 bps on Monday morning, following Friday’s strong session and a rate cut in China.

The $2.5 billion 2½% notes due 2020 that China Petroleum & Chemical Corp. (Sinopec Group) recently priced at 99.576 to yield Treasuries plus 125 bps moved to 115 bps on Monday, a London-based trader said.

And Sinopec’s 3¼% notes due 2025 that priced at 99.022 to yield Treasuries plus 145 bps traded Monday at 137 bps.

The new two-tranche issue of notes from China’s Kunlun Energy Co. Ltd. also received some attention in trading on Monday morning.

Meanwhile, market sources were whispering about upcoming issues from Hong Kong and Industrial and Commercial Bank of China Ltd.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.