CIMB Daily Fixed Income Commentary - 04 March 2014

Market Roundup

·        US Treasuries gained on safe haven buying as the situation in the Ukraine intensified while the US was heard pondering sanctions on Russia.
·        Traded volume along the Malaysian Government Bond market remained low, volume amounting to below RM2.0 billion for a second straight day. Interest was obviously lagging ahead of the MPC meeting this week. Yields ended the day mixed, unsurprisingly. Meantime, there was also some noted short covering along the 10-year MGS, which ended the day unchanged at 4.11% (versus high of 4.12%)
·        Offshore player sold Bt1.6 billion of Baht bonds on Monday, as nervousness increased amid the still unresolved domestic political situation and escalating worries over in eastern Europe. Meanwhile, onshore players were cautious as the latest CPI data was released, coming ahead of the 12 March MPC meeting.
·        IDR Government bonds rallied due to the risk-on mode. We are seeing aggressive buying interest in mid to longer part of the curve from foreign banks. The buying interest meets with real client that is selling on rally. However, on Monday the release of weak trade data pared the buying momentum, but we are still seeing strong buying interest. Trading volume jumped to IDR 11.31 trillion from IDR 8.29 trillion on Friday. The most traded bond was FR70 (2024) with IDR 2.74 trillion in trading volume and followed by FR68 (2034) and FR71 (2029) with IDR 1.48 trillion and IDR 1.32 trillion in trading volume respectively.