Summarise in 200 characters:

Treasuries kept yesterday’s ‘short-covering’ gains and traded even higher on weaker European PMI overnight. As NY came in, market was off highs as it looked toward UST supply this week. Tsys rallied off of lows into 1pm bidding process with 51b wi2s stopping at screws (-0.1bp thru); dealers a bit on heavier side with 17.6% vs 14.5%avg. WIs held and went in the money for post trade but fizzled out into the close as bid flipped to long end (specifically WN) as aggressive buying flattened the curve into 4pm. Flows were quiet with HF selling 2s, RM buying 3s, HF and RM selling 20s. Looking ahead, Spanish PPI and Ger IFO tonight along with MBA mtg applications, new home sales, 2yr FRN and 5yr auction tomorrow. All-in-all, market is carving out new local ranges as it consolidates with little overall client interest. At these lvls market is neutral amid geopolitical risks and look to play both sides within this 5.00/4.60 10s band with a steepening bias.

In China IG, fairly busy day with weaker tone generally but at least trading 2-way. Market saw some short covering in selective performing property names. Market traded 2-way in PINGRE with PB Selling vs RM buying, levels +/-50c still seeing better buying in 24s. VNKRLE also traded 2-way with some covering in the morning, levels 50c-1pt lower. AT1s were better bid with the overnight rally in rates, levels .125pts higher with local buying. Market also traded a block of CCAMCL Perps.

In China HY, calm session to start the week with macro and rates stabilising, however liquidity remains thin and buyers are cautious amidst recent volatility. Overall performing sectors are trading 0.25-1pts higher in Macau in line with the rates rally on day. China property remains mixed overall with performance largely line by line; Call it -1pt to +0.5pts. HK space is subdued with better selling from PBs, NWD complex down 0.5pts. COGARD 6.15% 25s trustee has issued a notice to holders stating an event of default has occurred. CSRC approves Fosun Pharma to issue up to RMB8b bonds onshore. 

In Sovereigns, rates rally managed to lure in buyers for INDON and PHIL with 10y +0.75, 30y +1-1.5pt. Buying was concentrated on duration since treasury long bond +2pts. Freeport also traded well with overnight demands continued, 10y +0.5pt and 30y +1.25pt. Frontiers quiet with SRILAN and MONGOL roughly unchanged. Asia IG - Asia spreads mostly 1-2bp better as China’s stimulus boost lifts sentiment, continue to see decent buying in sub SE Asia names. HY bonds were generally 0.25-0.5pts higher on the back of rates and equity rally last night, retracing roughly all the moves we saw yesterday due to the illiquidity. Sentiment surely better with appetite from RM came back to add but some ongoing outflow so unlike the last few days only getting asked for bids. VEDLN marked up 0.25pt with some demand seen overnight on the 25s. ADANI attempted to join the rally but see some trimming and 31s got hit down in the street at 65.5 (+0.25).

AT1s closed the day about 0.5pts higher, with some decent buying from investors globally. UCGIM was the significant outperformer on the back of strong Q3 results, closing 0.875pts higher.  DB, CMZB and SABSM were also 0.75-1pt higher.  Volumes were healthy also, with all regions participating. Active names include SOCGEN, BNP, ACAFP, HSBC, LLOYDS, BACR, RABOBK, UCGIM, BBVASM and BNS.