20250801-招银国际-Fixed_Income_Daily_Market_Update_6页_827kb

Fixed Income Market Update - 1 August 2025

Key Highlights

Market Trading Desk Comments

• UBS Notes: The new UBS 6.6 Perp remained unchanged, while the UBS 7 Perp tightened 0.1 basis point (bps). HAOHUA widened by 1-2bps; DAESEC tightened by 1-2bps.
• Government Bonds: STANLN/MIZUHO/SUMIBK FRNs tightened by 1-2bps. ANZ/CBAAU T2 widened by 1-2bps, indicating divergence in yield expectations.
• Corporate Bonds: HYUELE stocks tightened by 5-16bps since its Q2 2025 earnings; VNKRLE's bonds softened slightly. China IG bonds saw mixed movement, with notable tightening in certain segments.

Trading Desk Observations:

• Asia & Europe: Asian bank FRNs in demand, though Japanese and Yankee AT1s saw buying interest. London FRN sales were attributed to macro uncertainty.
• Specific paper movements: VNKRLE 26-29s soft by 0.4-0.5 pts; YLLGSP 26 firm by 0.1 pt; China IG IGs end tighter.
• Policy shifts: Investors turned to USD-denominated issues due to lack of catalysts in lower-yielding CNH; tactical sales by hedge funds to lock profits.

Latest Rating Changes & Commentary

• SK Hynix (HYUELE): Moody’s revised outlook to positive with affirmed Baa2 rating. The company posted record Q2 revenue and profitability driven by AI chip market leadership (HBM chips). Recommendation: Maintain Buy position, highlighting HYUELE 1½ 01/19/26 and HYUELE 2⅜ 01/19/31 due to attractive yields.

China Economic Review

• PMI data: July manufacturing PMI at 49.3%, below expectations; new orders and export orders weakened further, signaling fading export frontloading. Construction PMI also softened.
• Monetary Policy Outlook: Policy easing may not unfold until 4Q25 due to capped retail sales and marginal consumption effects. Deeper stimulus could follow if a US trade deal materializes.

Corporate News Highlights

• Adani Enterprises: EBITDA fell 12% YoY in Q1 FY26.
• Dalian Wanda: Sold Wanda Plaza investment.
• Wynn Macau: Senior facility extended by USD1bn to USD2.5bn.
• Real Estate: Higher home sales in India hinted by stimulus fatigue.

Macro News Recap

• US Markets: S&P500, Dow Jones, and Nasdaq declined. Core PCE rose slightly. 10-year Treasury unchanged.
• Asia/Global: VNKRLE secured USD869mn loan from Shenzhen Metro; VNKRLE 26-29s sold within the trading range. Thai and Korean equities mix movement.

Bond Issuances

• Onshore China: 66 credit bonds worth RMB35bn issued, up 12.7% YoY.
• Offshore Asia: No pipeline issuance pipeline announced.

Disclaimer
CMBIGM excludes liability for reliance on report content. Analysis based on public sources and subject to change.