CIMB Daily Fixed Income Commentary - 07 May 2014

Good Morning,

Market Roundup

• US Treasuries strengthened along the long ends, as players still showed buying interest despite 10T yield came down drastically by 44bps on year-to-date basis, partially fuelled by foreign buying interest as well as short covering activities.
• Malaysian government bond yield curve flattened amid thinner transactions on Tuesday. Players were noted trimming positions to mitigate risks ahead of this week MPC meeting. However, we still see decent demand on the 7-year GII benchmark, as it lagged the prior MGS strengthening trend.
• Thai sovereign bonds weakened on the back of profit taking activities, paired with foreign net selling interest. Market focus was on the short dated paper TB14604B, which contributed total trading value of THB18.54 billion.
• IDR denominated government bond market still moved in sideways within tight range. In general, the market was thinly transacted with total volume of IDR4.77 trillion only, dropping from previous day of IDR6.37 trillion, whilst the 5-year FR69 contributed the largest trading volume of IDR778 billion. Meanwhile, other series booked volume of below IDR500 billion each. Some players still showed better demand along the shorter dated papers. We see that the market may keep its sideways movement ahead of BI rate announcement tomorrow, where the economists view that it will be kept unchanged at 7.50%.  
• Asian dollar credit spreads were seen traded from unchanged to slightly wider, as investors were pricing in the soft April China’s manufacturing PMI figure. Meanwhile, new issues such as CLP Power perps held firm at 99.98pts and Korea Land Aug’17 was traded unchanged at 98bps on Tuesday.

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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