CIMB Daily Fixed Income Commentary - 20 October 2014

Market Roundup

• US Treasuries were under selling pressure on profit taking, further erased gains recorded earlier, alongside the improved sentiment.
• Malaysian government bonds were actively transacted on Friday, amounted to RM5.4 billion. MGS benchmarks posted gains on better bidding interest, while GII papers weakened under thin selling pressure. We expect to see thinner transactions in the near term, in tandem with Deepavali public holiday.
• Thai sovereign yield curve ended steeper, as players took profit along the long end of the curve. On top of that, we view that the selling pressure may also be attributed to the anticipation of fresh supplies in long dated govvies in coming weeks. Meanwhile, daily volume shrank to Bt14.2 billion on Friday, from Bt21.6 billion a day ago.
• In Indonesia government bond market, Prabowo asked his follower to support Jokowi government; Jokowi to be inaugurated this Monday. The good local news, combined with global rebound drive bond price higher. We saw foreigners buying 10y and 15y benchmark series.
• Asian dollar credits held firmer on improved global sentiment. CLP Power perp headed higher from 100.27pts to 100.43pts, while State Grid paper maturing 2044 traded lower by 0.31pt to 108.83pts.