December 12, 2016 / 8:33 AM / 10 months ago

ASIA CREDIT CLOSE: Markets quiet ahead of Fed meetings

HONG KONG, Dec 12 (IFR) - Asian credit markets began the week cautiously, prior to the closely watched US Federal Reserve meetings on Tuesday and Wednesday. Analysts and investors widely see the Fed raising US interest rates.

The iTraxx Asia ex-Japan investment-grade index was spotted about 0.25bp wider at 117.667/119.667, with traders describing the session as very quiet.

Primary markets were also subdued, as some syndicate desks said they were finished for the year, with Friday’s spike in US Treasuries making the market more expensive for issuers.

There were, however, expected to be one or two deals done on Tuesday, both involving Chinese issuers.

One of the biggest movers on the day was the price of oil, with Brent Crude going up to US$56.71 per barrel, its highest in 18 months, after oil-producing countries agreed to cut output.

Oil-related credits seemed to benefit, if only slightly for some. Spreads on Petronas’ 2025s were 5bp tighter, while CNOOC’s were in 1bp, according to Tradeweb.

Sovereign names were slightly weaker. Yields on Indonesia’s new 2022 and 2027 bonds were both about 4bp wider.

In the high-yield area, recent issuer Country Garden saw yields on its 2026 bonds widen about 1bp.

The bonds, which failed to price after an aborted attempt in November, were being bid at 100.517 after issuing at par last Wednesday.

Reporting by Spencer Anderson; editing by Dharsan Singh

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