Secondary market review
In terms of epidemic situation, due to the low mortality after the outbreak of Omicron, the market has generated the hope of "mass immunization", but the medical resources in the United States may be tight in the near future. In terms of US bonds, the weak demand for US bond issuance may be related to the rise in US bond yields. Iran said that the negotiations on the Iranian nuclear agreement are moving in a good direction.
Last week, the yield of short-end US bonds rose higher than that of long-end US bonds. Last week, the 10-year US bond yield rose 1.74bp to 1.51%, of which the inflation expectation rose 9.00bp to 2.56%. The yield of two-year US bonds rose 4.41bp to 0.732%. In terms of interest rate spread, the interest rate spread between 10-year US bonds and 2-year US bonds narrowed by 2.67bp to 77.79bp. The dollar index fell 0.35 to 95.67.
US credit bonds and Chinese dollar bonds fluctuated slightly. Last week, the return on US investment grade bonds was 0.14%, the worst yield fell 2bp to 2.34%, the return on us high-yield bonds was 0.23%, and the worst yield leveled to 4.20%. The return of Chinese dollar investment grade bonds was 0.04%, and the worst yield rose 1bp to 2.56%. The return of Chinese dollar high-yield bonds was - 0.50%, and the worst yield rose 6BP to 16.85%. In the industry, the yields of real estate, finance and urban investment were - 0.03%, 0.05% and 0.14% respectively.
Changes in Chinese dollar real estate bonds
The price of real estate bonds fell sharply last week. Among the top ten, South China city rose 89.68%, Evergrande 22.90%, Rongxin China 18.31% and Greenland 10.41%. In the list of decline, Xinli, Evergrande, Yuzhou and Aoyuan fell 45.34%, 35.46%, 14.00% and 10.41% respectively.
In terms of events, on December 30, according to Bloomberg, some holders of two US dollar bonds of China Evergrande said that they did not receive bond interest on Tuesday's interest payment day. According to the bond issuance documents, there is a 30 day grace period after the interest of Evergrande bonds expires. If it still fails to cash within the grace period, it will be announced that there is a default.
In terms of rating, on December 30, united credit decided to downgrade the credit rating of the main body and related debts of Shanghai Shimao Construction Co., Ltd. from AAA to AA +, and the rating outlook was adjusted to negative.
