CIMB Daily Fixed Income Commentary - 04 November 2014

Market Roundup

• Front end of the US Treasury yields further rose by 2bps, on the back of slight cautious sentiment towards midterm election in US, alongside stronger-than-expected ISM Manufacturing figure.
• We saw decent bidding interest along the Ringgit govvies, amid positive sentiment post BoJ announced to expand its asset purchases. Daily volume fell a tad lower from RM3.1 billion to RM2.5 billion, while market focus was on GII May’24, which closed 1bp lower at 4.11%.
• Thai govvies posted decent gains along the curve, guided by the lower inflation reported on Monday. CPI headed lower from 1.75% to 1.48% for the month of October, against 1.60% forecasted by economists. Meantime, local players showed strong buying interest, with total net buying amount of Bt12.3 billion, with the expectation of possible rate cut in the incoming MPC meeting scheduled on Nov 5.
• Indonesia CPI in October posted 4.83% YoY (Survey 4.70% YoY). Trade balance in September was USD -270M (Survey -280M). Indonesia government bonds continued to rally, foreigners were probably behind the rally. Today bond auction target is only IDR 5 trillion.
• Asian dollar credit market saw thinner flows on Monday, after the investors were busy consolidating their portfolio with the heavy issuances over the recent weeks. On the other hand, Bloomberg reported that players are expecting a lower amount dished out from the primary market for the month of November, ranging in between $10-15 billion, in contrast to $20 billion recorded in October.