CIMB Daily Fixed Income Commentary - 14 November 2014

Market Roundup

• US Treasuries strengthened despite weaker demand at the latest 30-year government auction as players reassessed their positions after recent weakness.
• GBP/USD lost support and further dipped to near 1.5700 this morning, as market continued to react on the softer inflation outlook highlighted by the central bank earlier. Meanwhile, market is generally expecting the inflation to stay unchanged at 1.2% for the month of October.
• We saw pretty good flows in Malaysian government bond market, as trading volume surged from RM3.1 to RM4.3 billion, aided by the 10-year reopening auction. Better sellers in the market on Thursday, as players chose to stay sidelined ahead of Friday’s 3Q2014 GDP report.
• Thai sovereign yields inched up along the curve, as players realized profits on the recent rally, which was caused by the speculative move on lowering the interest rate in the coming MPC meeting. Aside, secondary trading activities were relatively subdued ahead of 3Q2014 GDP report, looking at the daily volume of Bt8.9 billion, in contrast to Bt26.4 billion a day ago.
• Indonesia government bond market was range-bound with some offshore buying activities seen in the 10yr & 15yr buckets, while selling action was done by locals, sending 10yr-15yr yield down 3-4 bps. Other activity seen in 3yr bucket with new retail bond (ORI11) that has started to trade in secondary market.
• Asian credits hovered at Wednesday’s level, as players stayed at sideline while awaiting fresh primary deals, in conjunction with the absence of major catalyst from the US market. CLP Power perp was traded unchanged at 100.86pts, while CNOOC Apr’24 was quoted around 148bps.