Monday, March 7, 2016

CIMB Daily Fixed Income Commentary - 07 Mar 2016

Market Roundup
  • US Treasury yields climbed on the back of gains in crude oil prices and stock market, and strong NFP number released ahead of weekend. The NFP recorded 242k in Feb, way above estimate 195k and prior reading of 172k a month ago. Aside, unemployment rate stood unchanged at 4.9% during the same period.
  • Ringgit denominated sovereign bonds closed slightly firmer, amid thinner flows ahead of weekend. Meantime, MYR strengthened late Friday, we think that the stronger MYR should pressure the yields lower on front end and bellies of the curve in the near term, amid speculation of further easing heading toward the MPC meeting scheduled this week.
  • Thai govvies stood on stronger footing on Friday. Flows concentrated on front end and bellies of the curve, including LB196A, LB21DA and LB25DA. Upcoming focus will be on the Bt10 billion LB666A auction slated for 9 Mar.
  • Another rally was seen in Indonesia government bond market on Friday, driven by another round of offshore inflows ahead of tonight's US jobs data. Buying flows were still focused on FR56, FR73 and FR72 benchmark series, followed by last year's 10-year benchmark (FR70). We maintain our stance that the bond market will consolidate, and prone to profit taking at this level. Market volume was steady amounting IDR15.4 trillion.

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