CIMB Daily Fixed Income Commentary - 10 April 2015

Good Morning,

Market Roundup

• US Treasury yields were pushed higher by better-than-expected economic data, coupled by a weak 30T auction on Thursday.
• Malaysia government bonds ended mixed on Thursday after the recent rallies, though we still noted foreign flows into the market, particularly along the 10-year MGS. Interest was also seen along shorter dated papers, including both MGS and GIIs, such as MGS Sep’15 which shed 2bps to 3.00% on RM500 million volume. Meantime, GII Sep’15 fell 3bps to 3.12% on RM660 million flows. Total traded volume along the govvies including GG papers was RM6.14 billion.
• Thai Baht was firm to close at 32.531 on Thursday but government bonds ended rangebound with foreign players net sellers of Bt5.7 billion of debt papers the same day whilst IRS levels were pretty stagnant amid cautious trading. Ahead of the end-month MPC meeting there is a lack of macroeconomic data releases this week. On the other hand, a senior Bank of Thailand official was reported in the news saying the country may grow at less than the central bank’s forecast of 3.8% this year and said exports may see further contraction.
• Indonesian government bonds were traded stronger Wednesday, continuing their uptrend supported by offshore inflows. Buying activity centred on the longer end of the curve, mostly in the 15-year and 20-year buckets. Other than that, the overall bond market was a bit quiet ahead of next week's bond auction and BI policy rate meeting. Trading volume jumped to IDR14.9 trillion, mainly due interest on the retail Sukuk SR07 (IDR7.7 trillion).
• Asian dollar bonds were traded firm on Wednesday, seeing some fresh risk appetite which also pushed the region’s stock markets stronger on the day. We think investors were mainly on bargain hunting mode, seeing the recent weakness along the markets in Asia.