CIMB Daily Fixed Income Commentary - 30 June 2014

Market Roundup

• US Treasuries were held pretty unchanged on Friday, as short end yields inched down by 1bp, while the long end edged up marginally by 1bp as well. Week on week, 10T and 30T yield fell by 7bps to close at 2.54% and 3.37%, as players were seen pricing in the accommodative statement in the last FOMC meeting.
• Malaysian sovereign yield curve shifted lower, following the strong auction result of the 20-year GII. Meanwhile transactions surged dramatically to surpass RM4 billion ahead of weekend, from RM1.2 billion a day ago. Also, foreign players showed decent buying interest on the MGS maturing 2017, while GII Sep’14 was actively traded totalling RM1.1 billion.
• Thai government bond yield curve flattened, on the back of strong net buying activities from the local players. Meanwhile, daily trading volume edged up to Bt14.7 billion from Bt12.3 billion a day before. LB196A was actively traded, while yield was pressured 2bps lower led by the decent buying interest.
• IDR denominated government bond market booked gains after weakening in the last few days. Although the bond market posted gains, rupiah weakened and touched more than 12,100 on the day. In general, the bond market recorded pretty active transactions with total amount of IDR8.15 trillion, marginally increased from prior day of IDR7.45 trillion. We see the market may show moderate activities ahead of inflation rate and trade balance announcement.
• Asian dollar credits were moving in sideways, amid lacking of liquidity in the secondary market due to no fresh market catalyst at this juncture. Recent issue AmBank maturing 2019, was seen traded firm around 137bps, compared to the issue spread of 150bps earlier.