CIMB Daily Fixed Income Commentary - 21 November 2014

Market Roundup

• US Treasuries posted gains on Thursday, despite held back by the unexpected strong Philadelphia Fed Business Outlook survey reading of 40.80 for the month of November, compared to 20.70 recorded in prior month.
• Malaysian government bonds extended losses amid thinner trading interest. GII May’24 was in the limelight, traded 1bp higher at 4.14%. We think that the 10-year GII still offers decent spread of 23bps against 10-year MGS.
• Thai sovereign yield curve steepened, amid thin selling pressure along the long end of the curve. Aside, Thai govvies were actively traded, amounted to Bt24.6 billion, while focus was along the curve bellies. LBA37DA closed at 3.78%, 2bps lower than prior day close.
• Indonesian government bond market continued to strengthen post-fuel price hike with foreign names still showed strong bidding interest. Today's popular series are FR70 (10yr benchmark) and ORI11 (3yr retail bond). Offshore inflows also appeared in all other on-the-run issues (5yr, 15yr, 20yr).
• Asian dollar credit primary deals were easily absorbed by the market, despite numerous pipelines are expected to be rolled out in the near term. While new issuances remained upbeat, we saw some selling pressure in the secondary market, probably trimming positions for the new issues, which include the gigantic bond issuance from Alibaba, with an estimated size of $8 billion.