CIMB Daily Fixed Income Commentary - 26 March 2014

Market Roundup

• US Treasury yields rose along the long ends, as players were seen taking profit after pairing gains recently. Meantime, shorter ends stood firm at previous levels.
• Malaysian government bond market was quiet on Tuesday, as players continued to remain sidelined whilst waiting for the 7-year MGS auction announcement. Meantime we noted some selling pressure on MGS Apr’14, whilst extending duration onto MGS Jul’24 and Apr’30.
• Thai government bonds strengthened amid improved buying interest from both local and foreign players. Along the government segment, LB155A was actively traded, amounted to THB6.4 billion. Aside, the short-tenure CB14626B contributed the highest trading volume along state agency segment, totalling of THB16 billion, with an average yield of 2.039%.
• IDR denominated government bond market still hovered in the negative area on Tuesday. In general, the market moved slightly, but we saw quite significant selling pressure on the benchmark series named 10-year FR70. This paper booked the most losses compared with other series on the day. Trading volume unchanged substantially to IDR10.50 trillion, but only selected papers such as 10-year FR70, 20-year FR68 and several off-the-run series (1-year FR27, 8-year FR61, and 18-year FR58). As we still view there is no market direction guidance and they await domestic economy data announcement next week, the market will continue move in narrow range.
• Asian Dollar credits were trading in narrow range amid lacking of major market drivers. In general, IG credits were seen trading in tight range of 2-3bps. On the primary deal, China Construction Bank issued 3-year paper at T+175bps, offering higher premium compared to peers’ current market levels.

Best Regards,
CIMB Fixed Income Research
Corporate Banking, Treasury and Markets
Tel: +603 2261 8888 | Fax: +603 2261 8705
www.cimb.com

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