CIMB Daily Fixed Income Commentary - 10 July 2014

Market Roundup

• US Treasury yields were pressured lower alongside the release of June FOMC meeting minutes on Wednesday. The minutes revealed that the Fed planned to quit the entire QE programme in October this year, if economic growth is on its projected path. However, timeline for interest rate hike remained uncertain.
• Ringgit denominated government bond market recorded decent trading volume of RM2.4 billion well ahead of MPC meeting. MGS Sep’21 continued to attract good buying interest, which eventually pressured the yield lower by 2bps to 3.87%. Aside, GII Mar’15, Mar’21 and May’24 were also well bidded and traded firmer.
• Thai sovereign yield curve marginally steepened, as the long end yields edged up by 1bp. Meanwhile, trading flows were improved from Bt10.0 billion to Bt14.9 billion on Wednesday. LB296A garnered pretty decent volume of Bt8.1 billion, while yield was traded higher by 0.5bp to 3.925%. Similarly, IRS rates were seen hovering at prior levels, while front end of the curve rose by 1bp.
• Indonesian bond market closed on Wednesday’s presidential election.
• Indonesian dollar credits were traded a tad higher, alongside the unofficial news which reported that Jokowi led by a few percentage points in the tight race of presidential election during midweek. Indonesia sovereign credit maturing 2043 remained upbeat by edging up another 1pt to 89.50pts.