CIMB Daily Fixed Income Commentary - 20 January 2015

Good Morning,

Market Roundup

• US market closed on Martin Luther King Day. Last Friday, US Treasuries weakened, as players took profit after the University of Michigan Consumer Confidence Index showed an upbeat reading of 98.2 for the month of January, in comparison with 93.6 recorded a month earlier.
• Ringgit govvies dealt weaker on Monday, as players realized profit well ahead of the announcement from the Prime Minister on possible fiscal policy changes or 2015 budget revisions, after taking into account of the global crude oil price slump. Despite the profit taking activities, the government bond market showed a decent daily volume of about RM2.5 billion, with MGS Apr’30 in the limelight, transacted by RM816 million.
• Thai govvies further weakened amid cautious sentiment, after registering three consecutive days of foreign net selling interest late last week. Aside, daily volume shrank drastically from Bt25.3 billion to Bt10.7 billion on Monday, while market focus was along LB196A and LB21DA.
• Indonesia government bond yield curve went up yesterday as prices drifted lower ahead of tomorrow's bond auction. Market was a bit quiet on US holiday, with FR70 (10yr) and FR68 (20yr) still dominating, accounted to almost 40% of today's total transactions. Total volume was IDR 10.34 trillion. MoF is targeting IDR 12T issuance on today's bond auction, with 12m SPN112, 10yr FR70 and 20yr FR68 being auctioned bonds.
• Muted trading interest seen in Asian dollar credit market, as investors were cautious and stayed on the sidelines ahead of Martin Luther King Day, alongside the ECB meeting and Greek election scheduled this week.