CIMB Daily Fixed Income Commentary - 10 Jun 2015

Market Roundup

• On Tuesday, better-than-expected economic data and rise in German bund yields drove the US Treasury yields higher by 4-6bps across the curve, reversing the small recovery a day before. The wholesale inventories grew by 0.4% in April, above consensus estimate of 0.2%.
• Malaysian government bonds recovered some losses registered a day before, supported by buying-on-dips interest, while USD/MYR dipped marginally and hovered at 3.7480-3.7650 on Tuesday. Elsewhere, Ringgit IRS curved ended flatter, reversed the knee-jerk bear-steepening movement a day ago.
• Thai govvies closed firmer, on the back of decent buying demand, which pressured the benchmark yields a tad lower, pairing the losses posted earlier the week. Trading volume stood at Bt15.1 billion, led by heavier flows across the bellies, which included LB196A, LB21DA and LB236A.
• Indonesia government bond market rallied on auction day, as government received overwhelming incoming bids (25.3T) from IDR10 trillion target issuance on the back of offshore demand. FR71 accounted for more than half of the incoming bid (IDR13.8 trillion). In addition, government upsized the issuance by 50% to IDR15 trillion to accommodate the strong demand. Market traded up on short supply post-auction, accompanied by skyrocketed transaction volume worth IDR 30.29 trillion.
• Asian dollar credits ended weaker, despite the slight recovery in overnight UST. On the other hand, China inflation eased from 1.5% to 1.2% in May, dragged by the lower food cost. Among the new names, Bharti Airtel Jun’25 was quoted 6bps wider to T+216bps from issued spread.