CIMB Daily Fixed Income Commentary - 24 April 2015

Market Roundup

• US Treasuries consolidated with yields down 1-2bps at the close on Thursday. Disappointing economic numbers comprising jobless claims, new home sales and manufacturing data contributed to the movement. Initial jobless claims for the week ended 18 April was 295k against 287k consensus and the prior week’s 294k. Also new homes sales in Mar was 481k against 515k consensus and the previous month’s 543k.
• The US dollar remained weak after the release of economic data which showed the US economy has not broken from its sluggish trajectory. USD/JPY was about 119.60 this morning against 119.94 overnight.  This morning, US dollar is also mixed to weaker against Asian currencies. Economic data for today include Japanese PPI, Korean consumer confidence numbers and Singapore factory production data.
• Malaysian government bonds extended gains, as the market reacted to the positive comments by Bank Negara Malaysia’s Governor Zeti on Thursday at the InvestMalaysia conference. She doubted that the basis of possible downgrade on Malaysia’s credit rating, as the country’s fundamental remains strong.
• Thai sovereign yield curve inched lower, amid decent buying interest, particularly along the bellies of the curve. Secondary trading remained active, partially driven by auctions held a day before, while the daily volume shrank from Bt46.3 billion to Bt29.9 billion on Thursday.

·  Overall a quiet day for Indonesia government bond market, with bonds generally traded in tight range for most of the day. Some selling action especially in the 20-year benchmark bond during London open, sending yield curve higher. Most popular bonds traded on Thursday were the 10-year & 20-year benchmark bonds and the new 3-year retail sukuk (SR07). Elsewhere, trading volume improved to IDR 10.98 trillion.

• Asian credits dealt firmer on Thursday, as spreads tightened following rise in UST yields. Newly issued Sinopec’s 5- and 10-year ended tighter by up to 6bps, while the long dated 30-year paper was seen almost unchanged near T+152bps due to the relatively rich valuation.