CIMB Daily Fixed Income Commentary - 09 Mar 2016

Market Roundup

• US Treasury yields fell across the curve, driven by flows for safe-haven assets following reversal in crude oil prices and stock markets. The 10T yield headed lower to near 1.80%, but eventually edged higher to close at 1.83% amid profit taking activities.
• Malaysian government bonds closed marginally weaker, amid cautious trading heading into MPC meeting. Expect trading to move within a tight range before the MPC meeting, but support is expected if USD/MYR is able to sustain near 4.1000. The central bank is not expected to cut rates just yet (that may come in 2H2016) and we see profit taking risk for MGS post-MPC.
• Thai sovereign bond yield curve ended flatter, supported by persistent net buying interest. On the other hand, USD/THB edged lower to 35.37, while we think that support should be around 35.30 for this week.
• Indonesia government bonds posted losses on the back of weakening IDR currency. Market was generally quiet with better selling mode. We have seen supporting bids on the front end tenors while bid interest in the back end disappears. MoF held IDR syariah bond auction on Tuesday, and issued IDR6.95 trillion, higher than IDR4 trillion target, with incoming bids look solid at IDR11.3 trillion. Market volume decreased to IDR10.9 trillion.