CIMB Daily Fixed Income Commentary - 21 October 2014

Market Roundup

• US Treasuries posted little gains early the week, supported by buying-on-dips interest particularly along the front end of the curve.
• Ringgit govvies were thinly traded, as total trading volume fell from RM5.4 billion to RM1.7 billion on Monday, amid a lack of market catalyst at this juncture. On top of that, MGS benchmarks were held steadily along with the lacklustre activities.
• Thai government bonds extended losses, guided by heavier profit taking flows ahead of King Chulalongkorn Memorial Day on Oct 23. Meantime, market is anticipating two government bond auctions to be conducted on Tuesday, namely ILB283A (Bt4 billion) and LB21DA (Bt20 billion). Aside, 10-year basis widened by 5bps to 23bps.
• Indonesia Government bond market opened higher on positive local sentiment as newly elected president Jokowi was sworn in today, and opposition leader Prabowo likely will support Jokowi's programs. Offshore inflows were seen in market today, bought mostly in belly to longer end buckets. Some local banks use the opportunity to sell on rallies.

Market saw thinner flows as investors were slightly cautious ahead of the release China’s third quarter GDP report on Oct 21. Market focus was on the Indonesian names, which posted gains alongside the Jokowi’s