"Could you add the Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan into the chart library? If Markit indices are not available, do you have any index to reflect Asia (esp Singapore) Investment grade corporate bond prices or yields?"

Eoin Treacy's view Thank you for these suggestions. I have added the Markit iTraxx Asia S15 5-year CDS index to the Chart Library. Irrespective of regional focus or asset class, most CDS indices have been trending higher over the last six months. This one surpassed 220 basis points yesterday and while it is becoming increasingly overextended a clear downward dynamic would be required to suggest a return to supply dominance. Widening of CDS spreads reflects a continued state of heightened risk aversion among investors.

Asian bond markets are comparatively thin but this is changing as the capital requirements of the region evolve, Singapore's market has deepened over the last decade but is still dominated by government agencies. From what I understand, issuers such as DBS and OCBC aim most of their issues at Hong Kong and other countries rather than the domestic market.

This portion of a report from AsianBondsOnline, dated September 2009, contains a list of Singapore's largest corporate bond issuers. I found two indices which at least partially reflect the performance of Singapore corporate bonds.

The first is the Bloomberg Fair Value (BFV) SGD Agency 10-year Index. This includes issuers such as Housing & Developing Board, Land Transport Authority, Ascendas and Public Utilities Board. All of these are government agencies but are also among the largest issuers of Singapore Dollar bonds. The Index hit a medium-term peak in February and remains in a relatively consistent downtrend. It lost momentum from early August but a sustained move above 2.4% would be required to question scope for additional downside.

Spread over Singapore 10-years, Agency bonds have been quite volatile, ranging between 0 and 100 basis points over the last four years. They encountered resistance close to the upper side in late September and a sustained move above 85 basis points would be required to question scope for some further compression.

The second is the BFV SGD AA 10-year Index. This index is mostly comprised of Australian financials issuing in Singapore Dollars but does include SP PowerAssets. Yields compressed steadily until a year ago and have been in a base building phase since. It rallied impressively over the last month and is now testing the upper side of the range near 3.4%. A sustained move below 3.3% would be required to question current scope for additional upside.

The AA Index spread over Singapore 10-year government bonds broke out of a yearlong base in July and continues to extend its advance. A sustained move below 160 basis points would be required to question the consistency of the uptrend and to suggest a lowering of the risk premium.

The Straits Times Index failed to sustain the break of the progression of lower highs in August and broke sharply lower. It is overextended relative to the 200-day MA as it approaches the potentially important 2500 level but a clear upward dynamic will be required to check momentum beyond a brief pause.