Thursday, June 4, 2015

CIMB Daily Fixed Income Commentary - 04 Jun 2015



Market Roundup
  • US Treasury yields were push higher, following the sell-off in German bunds, alongside decent ADP employment data. The 10-year German bund yield surged by another 17bps to 0.88%.
  • Players continued to show better demand on the short dated MGS papers, amid cautious trading on Wednesday. Focus was on the reopening of 10-year MGS, which was announced with an issuance size of RM3 billion, in line with our and market expectation. WI was first quoted at 3.95/93%, before eventually shifted to 3.97/93% on Wednesday.
  • THB denominated government bonds weakened further, trekking the overnight UST movement. Meantime, the market saw heavier trading volume totalling Bt44.8 billion, in contrast to Bt15.4 billion recorded a day ago, aided by the LB21DA auction held on Wednesday.
  • Indonesia government bond yield curve went up on Wednesday in line with US Treasury movement. Most of the selling pressure was seen on bellies to longer end of the curve. However we saw market was well supported at current level.
  • For Asian dollar credit market, highlight was on the primary pipelines during mid-week. Woori Bank’s 30NC5 Basel III AT1 paper was guided at 5%. Meantime, China Three Gorges was pricing its 10-year USD tranche at T+165bps, while the 7-year EUR tranche was indicated at MS+110bps. Aside, Bharti Airtel guided its 10-year paper at T+220bps, while Beijing Construction targeted to issue a 3-year bond at 4% range.


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