CIMB Daily Fixed Income Commentary - 21 Mar 2016

Market Roundup

• US Treasury yields fell across the curve, supported by drop in crude oil prices and dovish FOMC meeting outcome. Also, we think that the lower yields in both Japanese bonds and German bunds continued weighing on UST yields.
• Ringgit govvies extended gains, riding on the MYR strength heading into weekend. Meanwhile, flows were thinner as daily volume dipped from RM5.9 billion to RM2.66 billion.
• Thai sovereign bond yields edged lower across the curve, in line with overnight UST movement, amid decent buying interest on the back of dovish tone from Fed. Elsewhere, daily volume further shrank from Bt27 billion to Bt20 billion on Friday.
• Indonesia government Bond market weakened following BI MPC meeting, as market has priced in the widely expected BI rate cut, and some market players were taking profit on Friday. However support bids still showed up, limiting downward pressure on the bond prices. Market volume decreased a tad but still considered huge amounting IDR19.9 trillion.
• Dovish FOMC meeting outcome spurred gains in both regional stock and Dollar credits heading into weekend, despite primary pipelines continued to emerge, led by financial sector. Elsewhere, iTraxx ex-Japan IG Index tightened by 4bp to 134bps, along with tighter regional CDS spreads, buoyed by risk-on sentiment.