CIMB Daily Fixed Income Commentary - 10 March 2015

Good Morning,

Market Roundup

• US Treasuries recovered some losses, led by the ECB’s initiation of its QE programme, alongside buying-on-dips interest, amid a lack of fresh guidance from the US economic data release.
• Ringgit bond yields and swap rates rose Monday, especially along medium tenor bonds, reacting from higher US Treasury yields overnight and continuing after last week’s no rate cut by Bank Negara Malaysia.
• Rise in US Treasury yields and weak baht (at 32.58) conspired to send Thai government bond weaker Monday, with players further pricing out prospects for a rate cut at this week’s BoT policy rate meeting. Foreign players were net sellers of Bt1.2 billion of Thai baht bonds Monday, continuing from net sell of Bt2.4 billion last Friday.
• Indonesia government bonds weakened post-US NFP data release and as the rupiah depreciated to 13,070. The market opened with wide bid-offer spreads causing yields to rise 20bps on average, with defensive bids seen along all benchmark series.
• Asian dollar credits were dealt weaker, reacting from last Friday’s rise in US Treasury yields and rising expectations of a quicker-than-expected Fed rate hike later this year. IG spreads were about 5-10bps wider on the day, though there were also hints of bargain hunting interest coming late in the day during the Asian session.