CIMB Daily Fixed Income Commentary - 10 October 2014

Market Roundup

• Persistent buying interest sent the US Treasury yields marginally lower on Thursday. However, market is expected to see correction after the recent strong rally, as some players view that there is little fundamental support for the strengthening trend at this juncture.
• Ringgit govvies posted little gains on bargain-buying activities, which pressured the yields lower by 1-2bps from front end to the belly of the curve. Daily volume was decent at RM3.3 billion, supported by the GII May’24 (-1bp), which actively transacted at RM850 million and closed at 4.13%.
• Thai govvies extended gains, in conjunction with lower UST yields. Meantime, trading volume leaped from Bt20.6 to Bt30.4 billion, as foreign players resumed buying activities, after being net sellers since Sep 29. LB196A was actively transacted totalling Bt10.6 billion, while yield closed 5bps lower at 2.77%.
• Bond market traded up following Fed news, market on better bid especially on belly to long end. Volume was relatively low, however buying flows from foreign bank were seen, sending down yield curve.
• Asian dollar credit market was well supported post release of FOMC minutes on mid-week. However, investors showed better interest on the primary market, which was noted with heavier flows. Nippon Life was reported selling a 30NC10 paper at the range of 5.25%, while Power Construction was looking to issue a perp, and would start meeting investors from Friday onwards. On top of that, Greenland Global and Bank of China were also found along the congested pipeline list.