Bonds tighten sharply

HONG KONG: Asian markets drew support from a constructive overnight session in the US, with indices cautiously higher and credit markets trading sharply tighter in the morning.
The Nikkei moved up one percent to be the day´s biggest gainer, while Shanghai and Shenzhen gained 0.5 percent and 0.3 percent, respectively.
The Hang Seng was the region´s main loser, as it fell 0.5 percent.
MSCI´s broadest index of Asian shares ex-Japan was up 0.6 percent.
Credit markets began the morning in bullish fashion, despite China´s being on holiday for the week, though they sold off later in the afternoon.
Asian ex-Japan CDS began the day as much as 9bp tighter, but, by the afternoon, was around 4bp tighter at 150.25/152.25.
"There was a strong move earlier in the day, but, by lunch, it had faded to more sensible levels," said an investment-grade bonds trader based in Singapore. "Investment grade ended about 2bp-4bp tighter.
Treasury yields are moving towards more acceptable levels and we´ve seen some better sessions from Asian and US equities, which has helped sentiment.