CIMB Daily Fixed Income Commentary - 09 October 2014

Market Roundup

• US Treasuries extended gains particularly along the front end and belly of the curve, after the Fed decided to keep the tone unchanged in the latest FOMC minutes, as the policy makers worried that the change may be wrongly interpreted by the market as a shift in policy stance.
• Malaysian sovereign yields inched up amid cautious sentiment heading towards Friday’s Budget 2015 announcement. Despite that, trading volume was moderate amounting to RM2.1 billion, supported by the 7-year SPK reopening auction.
• Thai government bond yields grinded lower on Wednesday, guided by consistent buying activities. Apart from that, total transactions surged to Bt20.6 billion, after a relatively subdued volume of Bt8.5 billion recorded a day earlier. Market focus was along LB196A and LB236A, which contributed a combined volume of Bt8.9 billion throughout the day.
• Another quiet day with better selling mode as Opposition Coalition again wins the election of People's Consultative Assembly leadership this early morning. Market discourage after the election result.  However seeing demand in short end tenor (3-8M) from offshore name. It sends YC steady in the short end while other parts go up by 3-7bps.
• Asian dollar credits dealt mixed on mid-week, while investors focused on the incoming pipelines issuances. KEB 10-year paper was well supported, and tightened by 6bps from the issued spread of 185bps in secondary trading.