Asian bond spreads widened on Monday as investors took profits after last week's rally, which saw the iTraxx index posting its best level in seven months on optimism that the worst of the global downturn may be over. "We are seeing mild profit taking after a strong performance over the last two weeks," a Singapore-based analyst from a regional bank said.
"But we are still seeing some money on the sidelines waiting to come in, particularly those who missed the rally." The Asia iTraxx investment-grade index excluding Japan widened to 210/220 basis points from 195/205 on Friday, a level not seen since early October, a Hong Kong-based trader said. The MSCI index of Asia-Pacific stocks outside Japan was up 0.3 percent as of 0319 GMT. The following were the major movers in cash bonds and credit default swaps (CDS):
China's five-year CDS widened by 10 bps to 85/95, tracking the performance of the broader market, traders said. China will announce trade figures on Tuesday and retail sales and industrial production on Wednesday.
South Korea's five-year CDS were wider by 10 to 15 bps to 175/180 ahead of the central bank's rate-setting meeting on Tuesday, traders said. Bank of Korea will likely keep its base rate at a record low, pausing for three months in a row, a Reuters poll showed.
Philippines' cash bonds fell for a second straight session, as investors pocketed gains after a rally last week. The country's 8.375 percent bond due in 2019 traded at 115.00/115.25 from Friday's 115.00/115.50, a Manila-based trader said. The bond peaked at 116.00 on Thursday, the highest since the debt was sold in January.
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