CIMB Daily Fixed Income Commentary - 14 Aug 2015

Market Roundup

• US Treasuries pared gains following the release of retail sales report, which pointed to a decent gain of 0.6% for the month of July. On the other hand, initial jobless claims were marginally higher at 274k for the week ended Aug 8, in contrast to 270k projected earlier.
• Ringgit govvies recovered losses, led by gains in MYR against USD in the morning session, ahead of the GDP report announcement. Sentiment also improved, as the 2Q2015 GDP grew at a pace of 4.9%, beating 4.5% forecasted by economists.
• Thai sovereign yield curve ended flatter, guided by better bidding interest across the bellies to the far end of the curve, while the short dated yields stood firm near prior levels. Meantime, daily volume was decent amounting Bt23.0 billion, while focus was on LB21DA, which contributed Bt8.2 billion throughout the day.
• Indonesia government bond market rebounded on Thursday along with USD/IDR slipped below 13750. Although volume was still relatively low, interbank bid appeared with market players tried to buy on dips. We think selective buying is going to continue tomorrow especially on benchmark series, however the upside might be limited with bond auction looming next Tuesday & risk-off mode caused by CNY devaluation. Volume decreased to IDR 8.4 trillion.
• Asian dollar credit market were seen with better bidders, recovering losses posted earlier, despite PBoC’s third consecutive move in easing Yuan on Thursday. Regional HY names strengthened a tad, as Indonesia Jan’25 edged higher from 97.89pts to 98.38pts, while PLN Nov’21 inched up from 105.06pts to 105.10pts.