APAC Cross Regional Credit Weekly: Spreads returned to two-month tights

JULI spreads tightened 2bp w/w to 90bp, returning to the tightest level in two months, with HG yields up 1bp w/w to 6.03%. HG fund flows saw the first outflow of US$418mn since early April, driven by a US$2.8bn mutual fund exit (largest since April 2025 and first in 21 weeks), while ETF inflows slowed to US$2.3bn (-45% w/w). US$54bn of gross issuance was priced last week against US$73bn of reinvestment income; reinvestment income is estimated at US$24bn this week, 40% below the September weekly average. The firm backdrop reflects yields close to three-year highs and month-to-date supply of US$129bn being below expectations and light on a net basis;