Outlook for the week
We view high yield bonds as more favourable given historically cheap valuations (Figure 2) and higher buffers against rising interest rates.
Key economic releases for the week
Last Week Summary
While the US economy begins to open up and states loosen restrictions, the situation is quite the opposite in Asia as Covid-19 infection rates pick up and countries beginning to tighten restrictions again. Despite this, Asia G3 primary market started off the month of May strong with deal volume at US$4.235bn (+19.6% WoW). Average Initial Price Guidance Tightening rose 6.2bps to 38.9bps. The 10yr US Treasury yield retreated to 1.57%. Last week, US$4.235bn of bonds was issued from 10 deals. Breakdown: Investment Grade: US$2.45bn, High Yield: US$785mn. Non-Rated: US$1bn.