CIMB Daily Fixed Income Commentary - 08 October 2014

Market Roundup

• US Treasury yields fell substantially from belly to long end of the curve, benefited from the equity market fund outflows amid risk-averse sentiment. 10T closed 8bps lower to 2.34%, the lowest since end of August.
• Ringgit denominated government bonds closed in sideways within narrow range, as players stayed sidelined ahead of Budget 2015 on Oct 10. Meantime, daily volume shrank from RM1.3 billion to Bt958 million on Tuesday. Aside, WI for the 7-year SPK was last heard at 4.17/11%.
• Decent buying interest from local players continued to pressure the Thai government bond yields lower by 1-4 along the curve. While foreign players were noted with improved buying interest, local players recorded a larger net buying amount of Bt5.4 billion on Tuesday, in comparison with Bt4.6 billion garnered a day ago. However, the consistent positive movement also dampened trading activities, as daily volume edged lower from Bt8.9 billion to Bt8.5 billion. On the other hand, IRS curve ended flatter in conjunction with the sovereign yield curve movement.
• Bond market rebounded from yesterday's losses, as bond traded up in thin volume. Saw locals buying in 10yr and 20yr buckets, despite we think that the volume appeared to be low. Most of market players still stayed sidelined, waiting for the election decision on the leaders of People's Consultative Assembly today.
• Secondary trading activities in Asian dollar credit market remained subdued, as investors stayed at sidelines in anticipating new issuances. We expect better buyers this week as the worries on the job creation eased.