CIMB Daily Fixed Income Commentary - 10 Mar 2016

Market Roundup

• US Treasury pared gains on the back of firmer crude oil prices and stock markets, alongside fresh primary supplies. Brent crude oil rose and revisited $41.00/bbl, after slipping from the peak of $41.48 reached a day before, to the low of $39.35/bbl. The 10T yield steadily climbed, and closed a tad lower than the immediate resistance level of 1.90%.
• Ringgit government bond market was relatively muted in the earlier session, before seeing heavier buying flows ahead of the MPC meeting outcome. BNM maintained the OPR unchanged at 3.25%, in line with market and our expectation, while the tone of MPC statement remains dovish. We continue to think that any cut in OPR, if need, should come in 2H2016. Point to note, CPI was last at 3.5% in Jan 2016. Hence, there was space for no loose monetary action today even if Bank Negara maintained its dovish view.
• Thai sovereign yield curve inched lower, along with bull-flattening IRS curve during mid-week. Buying sentiment was boosted after the central bank decided to slash the country economic growth forecast from 3.5% projected in last Dec, however the policymakers did not reveal any detail on it until end-March.
• Indonesian government bond market closed on Saka New Year holiday.