CIMB Daily Fixed Income Commentary - 28 October 2014

Market Roundup

• US Treasuries strengthened on Monday, supported by buying-on-dips activities. Despite that, players were seen cautiously buying while awaiting for FOMC meeting.
• Total trading volume in Ringgit govvies surged from RM1.6 billion to RM5.0 billion on Monday, boosted by the chunky trades in MGS Jul’16, which contributed a sum of RM3.6 billion throughout the day. Meantime, MGS benchmarks were moving in sideways while waiting for clearer guidance.
• Thai govvies posted losses, led by net selling activities triggered by foreign players amounting Bt3.8 billion on Monday. Short dated LBF14NA was in the limelight, with total transaction surpassed Bt4.0 billion, while yield held unchanged at 2.05%. Elsewhere, daily volume advanced from Bt11.5 billion to Bt13.9 billion.
• Indonesia government bond market moved mixed, steepening as market players looked to sell some bonds in belly to longer end tenures, however amount might be small. Market could trade in range ahead of this week's FOMC and local CPI and trade balance data.
• Asian dollar credits dealt mixed, amid a lack of major catalyst at this juncture. Moreover, transactions were light, partially attributed to the active primary market. Latest issuers included Tewoo, which targeted to price its 3-year paper at 215bps, while Korea Expressway was heard launching its 3.5-year bond around 125bps. On top of that, Baa3 rated China Travel was also looking to issue its 5- and 10-year tranches at 280bps and 375bps respectively.