JPMorgan is proposing a new Asia credit index with slashed China weighting in parallel to its existing $85 billion Asia credit index, amid growing geopolitical tensions and dimming appetite for Chinese property bonds, Reuters reported. For the new index, JPMorgan has suggested the weighting of China be cut to close to 30% compared with a level of about 43% in its existing JPMorgan Asia credit index in which China is the largest component, according to the sources familiar with the matter. The move comes after JPMorgan initially proposed expanding the existing JACI, but with China weighting cut to 29.86% from 43.14% now, according to a proposal shared with investors in January and reviewed by Reuters, and the second source and two other people.
The major Asian stock markets had a negative day today:
The major Asian currency markets had a negative day today:
Some economic news from last night:
Company Gross Operating Profits (QoQ) (Q4) increased from -11.5% to 10.6%
Core Retail Sales (QoQ) decreased from 0.5% to -1.3%
Retail Sales (QoQ) (Q4) decreased from 0.4% to -0.6%
European high yield corporate debt is increasingly vulnerable as the global economy slows, suggesting a higher risk of defaults, Deutshe Bank said in a note on Monday. While the sector spans issuers rated BB+/BA1 and below, those with a single-B rating or lower now make up 38% of Deutsche’s high-yield bond index, the highest in a decade after a wave of real estate downgrades. Sentiment in Europe has received a boost from the recent sharp fall in energy prices and China’s economy reopening but several headwinds remain, including the lagged impact of European Central Bank rate hikes and the risk of a U.S. recession dragging on European corporates, Deutsche noted. Deutsche said it expected around 55 billion euros in high yield bond supply in 2023, 15 billion euros more than in 2022, and anticipated a marginal increase in merger and acquisition and leveraged buyout activity in the first half of the year.
The major Europe stock markets had a green day:
The major Europe currency markets had a mixed day today:
Some economic news from Europe today:
M3 Money Supply (YoY) (Jan) decreased from 4.1% to 3.5%
The US National Association of Realtors reported an uptick in home sales this January, primarily supported by a short drop in rates. Contracts advanced 8.1% last month compared to December, which marks the second consecutive month of positive sales. On the annual level, however, home sales fell by 24%. The 30-year fixed rate mortgage fell to the 6% range in January, but is now pushing the 7% level. Due to historically limited supply and high rates, the positive trend is not expected to continue.
US Market Closings:
Canada Market Closings:
Brazil Market Closing:
The oil markets had a mixed day today:
The above data was collected around 12:10 EST on Monday
The above data was collected around 12:15 EST Monday.
Japan 0.502% (+0.2bp), US 2’s 4.79% (-0.014%), US 10’s 3.9238% (-2.52bps); US 30’s 3.92% (-0.015%), Bunds 2.581% (+5.2bp), France 3.058% (+4.5bp), Italy 4.425% (-0.9bp), Turkey 10.27% (+4bp), Greece 4.424% (+1.1bp), Portugal 3.474% (+5bp); Spain 3.624% (+3.7bp) and UK Gilts 3.808% (+15.1bp).