CIMB Daily Fixed Income Commentary - 22 Jun 2015 (Re-send)

Market Roundup

• US Treasuries ended firmer, guided by demand in safe-haven assets, due to the Greek debt saga (even though EU leaders were reported in last ditch talks to reach a deal).The EU, IMF and ECB have so far unwilling to release a final €7.2 tranche of financing unless Greece agree to fresh reforms. In addition, we reckon that the less-hawkish tone by the Federal Reserve also drove buying interest, as the UST yields hovered near the highest levels on a year-to-date basis.
• Despite the USD weakness, EUR/USD failed to break 1.1400 amid cautious sentiment on Greek bailout saga, and headed lower from the intraday-high of 1.1384. However, sentiment was supported after the ECB increased the emergency liquidity assistance for Greece ahead of weekend.
• Malaysian government bonds strengthened further ahead of the weekend, after the Federal Reserve sounded relatively dovish during the latest FOMC meeting, pairing with recovery in Ringgit. However, Ringgit strength eased on profit taking pressure, heading higher to 3.7435 late Friday.
• Thai govvies continued to attract bidding interest, pressuring the benchmark yields a tad lower on Friday. On the other hand, daily volume was relatively thin at Bt14.7 billion, compared to Bt29.4 billion a day prior.
• Indonesian government bonds were quiet on Friday, traded in range with mixed flows. Market rally on day before was capped to current level ahead of Tuesday's bond auction, where MoF upsized the target issuance to 12T from usual 10T target. There will be 5 series to be auctioned, with FR53 (07/21) and FR56 (09/26) off-the-runs among those auctioned series, instead of usual benchmark FR69 and FR70. Transaction volume halved to IDR 12.2 trillion.
• Asian credits dealt mixed, despite sentiment generally improved post FOMC meeting, investors remained cautious on the negotiation of Greek bailout. Aside, iTraxx Asia Ex-Japan IG Index tightened by 1.5bp to 110.5bps on Friday.