CIMB Daily Fixed Income Commentary - 20 November 2014

Market Roundup

• US Treasury yields rose by 1-4bps along the curve, guided by the latest FOMC meeting minutes, which revealed the hawkish views of some Fed members, who believed that the US economy growth path is intact for interest rate hike next year.
• MGS benchmark yields inched up along the curve, following weakening Ringgit. Ringgit govvies ended weaker, pressured by some cut loss activities, amid a lack of decent liquidity at this juncture.
• Thai sovereign bonds pared gains on the back of mild selling activities initiated by the foreign players, with net selling amount of Bt2.5 billion recorded on mid-week. Market focus was along the curve bellies namely LB21DA and LB236A, coupled with long dated LBA37DA auction.
• Indonesian govvies strengthened, guided by offshore inflows, after fuel price hike implementation and BI rate hike. Despite the government bond yields rose by 5-7bps upon market opened, foreign players were seen with strong bidding interest, and subsequently pressured the yields lower.
• Another quiet day for Asian dollar credits, as fresh primary deals were under the spotlight, with several new issuances reported on pipelines. NTPC was looking to price its 10-year paper at 230bps. Aside, Amipeace – wholly owned by Bank of China, targeted to launch 3- and 5-year tranches at 170 and 180bps respectively. The dual-tranche issuances are guaranteed by Bank of China. On the other hand, Axis Bank tried to issue a 5.5-year paper at the range of 195bps.