The supplydemand imbalance in Asia’s G3 bond markets reached a new peak in April as Asian borrowers piled into the market to try and stay ahead of rising US Treasury yields, resulting in spread widening across the board.
Investors’ ability to continue absorbing such strong supply, particularly from Chinese issuers, was tested to its limits, not least because some of them were still trying to unwind long positions in the secondary markets as well.
And while market participants expect supply to ease off in May, the key word is slightly, which means that few bankers or fixed income analysts expect any form of meaningful spread compression...
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