CIMB Daily Fixed Income Commentary - 27 November 2014

Market Roundup

• US Treasuries continued to show strength. On Wednesday, UST yields fell further, supported by weak economic data, and as Euro Zone govvies yields also remained low.
• Malaysian government bond market saw improved buying flows after IMF commented that the fuel subsidy removal may strengthen Malaysia’s fiscal position, and send the deficit lower than 3.00% of GDP in next year. The 10-year MGS garnered good demand, and closed 2bps lower at 3.85%.
• Thai sovereign yield curve ended marginally flatter, backed by stronger-than-expected exports number released on mid-week. Trade surplus reached $32 million for the month of October, thanks to the 3.97% expansion in exports, alongside the 4.88% dip in exports.
• IDR government bond market was rallying yesterday on the back of foreign buying flows. Think it was more on fuel policy sentiments. We are seeing few local names are taking profit but mostly because of yearly target. Total volume improved to IDR 11.25 trillion on Wednesday from IDR 9.48 trillion on Tuesday. Investors’ favorites were still benchmark bonds and retail bonds ORI011.
• Along the Asian credits, Chinese names dealt mixed, as some investors realized profit ahead of Thanksgiving Day. Longfor Jan’23 dipped from 98.21pts to 98.08pts, while China Overseas May’24 edged higher from 109.32pts to 109.40pts.