CIMB Daily Fixed Income Commentary - 12 August 2014

Market Roundup

• US Treasury yields rose a tad higher from recent low levels, as demand for safe-haven assets declined amid improved sentiment on Monday.
• Malaysian government bonds were actively transacted on Monday, as total trading volume surged drastically to RM6.7 billion, aided by the chunky trades contributed by MGS Aug’14 maturing on Aug 15. Players were seen rolling the MGS Aug’14 into 3-month and 1-year bills. Meanwhile, the govvies showed flattish movement ahead of incoming 7-year MGS auction announcement.
• Thai bond market closed on extra public holiday on Aug 11, in conjunction to the Queen’s birthday on Aug 12.
• IDR denominated government bond market gained on Monday as players began to showed buying interest after significant weakening during last week. However, the strengthening was limited, as yields only declined by around 3-5bps. Overall, the market activities were thin with total volume of around IDR5.54 trillion only, dropped from IDR7 trillion in the prior day. The benchmark series 10-year FR70 was traded dominantly with volume of IDR1.33 trillion on the day.
• Asian dollar credits scaled back some losses last week selling activities, as investors were seen better buying after the Ukraine tension slightly eased over the weekend.  The iTraxx Asia ex-Japan IG Index tightened decently by 8bps to 107bps on Monday. Elsewhere in the primary market, BB/B1 rated Bureau Capital was looking to offer a 5NC3 paper with initial price guidance at 10.5%.