LiveWire

Last week, Evergrande's dollar notes hit new lows as the developer warned that it would default on its loan. According to the company's quarterly report, a gauge of the company's ability to repay short-term borrowings weakened in the first half as cash and equivalents fell to a six-year low. When downgrading onshore notes on Sept. 2, China's largest credit rating service noted that if Evergrande can't sell assets and extend borrowings easily, pressure on the company's liquidity will increase. Some non-bank creditors have sought quick loan repayments, potentially limiting bondholders' access to funds. @Bloomberg

The green bond market is heating up again with investors bracing for a potentially record month of sovereign sales. the European Union prepares to enter the market, with 30% of its 800 billion-euro ($950 billion) pandemic recovery funding slated for green projects. The bloc will hold a call Wednesday with investors to give more details on its plans. Sovereign green sales in September could be at least 20 billion euros. @Bloomberg

Bond investors may not wait long to oppose Federal Reserve Chair Jerome Powell's efforts to separate the beginning of asset-purchase reduction from the countdown to potential policy-rate hikes. Since Powell stated last week that the central bank could start cutting its monthly bond purchases this year, traders have been predicting the Fed's exit from zero interest rates in early 2023, and Treasury yields have barely moved. @Bloomberg

The surge in muni prices comes at the same time demand is high across markets, driving up prices for homes, equities and a range of other assets. The nearly unending demand is crushing returns for prospective investors who want to earn tax-free interest. Still, bondholders who got into the market years ago are sitting on hefty returns. There are many reasons behind the surging demand in munis including among them, taxes potentially seeing a raise. Source: WSJ 

Ringgit bonds have lagged rupiah notes as Malaysia’s fiscal outlook deteriorated. Political uncertainties may add to the risks. Benchmark 10-year Malaysian debt has underperformed Indonesian securities, with the extra yield on the latter shrinking to 305 basis points, near the lowest in over three years. Easing bond supply and a greater sensitivity to lower Treasury yields have aided rupiah notes. Source: Bloomberg