Morning Commentary: Asian bonds firm up, then lose ground; Peru seeks issuance; Turkey eyed

By Christine Van Dusen

Atlanta, Aug. 18 – Asian bonds lost some early gains, Latin America assets were quiet and Turkey dipped on Tuesday morning against a backdrop of lower commodities, lower rates, weaker currencies, a stronger dollar and lower Asian equities.

“It's a continuation of trends,” a London-based trader said. “Most market commentators are not willing to pick a bottom on oil, as they fail to see a positive story on the demand or supply side.”

Asian bonds started off a bit firmer but took a hit as Chinese equities continued to fall, another trader said.

“Investment-grade cash bonds closed the day unchanged,” he said. “Lower oil had very little impact on oil names, with Cnooc Ltd.’s 2025 trading up at 180 bps, tighter by 2 bps.”

Bonds from Malaysia firmed up while Korea’s were broadly unchanged.

“Thailand spreads remained firm after the bombing in Bangkok,” he said.

Looking to Turkey, the sovereign curve got a lift in the morning but soon dipped after government coalition-building talks collapsed and the country moved closer to holding repeat elections.

“Bonds were left offered,” a trader said.

Meanwhile, notes from Latin America were “very quiet again,” a New York-based trader said.

In deal-related news, Peru announced plans for dollar-denominated notes with bookrunners Citigroup and JPMorgan, a market source said.

Proceeds from the Securities and Exchange Commission-registered deal will be put toward pre-funding 2016 requirements.

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