Fixed Income Daily Pulse, 23 Nov 2015

Today’s trade recap by our trading desk:-

· After seeing strong buying flows towards the end of last week, the week started off quietly with paper thin traded volume on the benchmarks. Yields remained largely unchanged from last week’s close apart from the 7Y which rose 4.5bps. There’s still strong interest on the short end bonds as implied funding remains attractive. Markets players in general are still adopting a wait and see strategy as there is an adhoc meeting by FED tonight to review the advance and discount interest rates charged to commercial banks. Any movement in rates here might set a path leading to a rate hike by the FED. We are also expecting the announcement of 3Y GII reopening tomorrow, with issuance size of between RM3.0 – 3.5bio.

MGS Benchmark Issues MGS Closing Level (%) Chg (bp) Vol (RM m) 3-yr 3.575 +1.0 50 5-yr 3.770 +1.0 56 7-yr 4.195 +4.5 81 10-yr 4.290 +2.5 216 15-yr 4.470 0.0 10 20-yr 4.590 - - 30-yr 4.770 0.0 20 IRS Closing Rates IRS Closing Yld (%) Chg (bp) 1-yr 3.840 0.0 3-yr 3.965 2.0 5-yr 4.075 2.0 7-yr 4.220 2.0 10-yr 4.430 2.0 Source: Bloomberg, AmBank          Source: BondStream, AmBank                      Local News: None.