CIMB Daily Fixed Income Commentary - 01 Apr 2016

Market Roundup

• UST yields further declined, in conjunction with falling stock market and crude oil prices late Thursday. We suspect that the gains in UST may also be driven by some short covering during the end of first quarter.
• Malaysian sovereign yield curve shifted lower amid heavy net buying interest seen in the last trading day of the quarter, with daily transaction totalling RM6.7 billion recorded on Thursday. We continued to see Ringgit govvies attracting demand, riding on the strong recovery in Ringgit, as USD/MYR dipped below 3.90 and hovered at 3.87 late Thursday.
• Thai govvies extended gains, guided by positive buying interest spurred post Fed chair Janet Yellen’s dovish comment made earlier, along with quarter-end demand. Foreign players registered net buying amount of Bt6.6 billion, higher than the Bt11.9 billion recorded a day prior.  Upcoming focus will be on auctions for LB446A (Bt10 billion) and LB206A (Bt20 billion), which are both scheduled on 5 Apr.
• Indonesian government bond rallied again on Thursday. Bond market opened steady and prices went down by 25 cents as some banks went for profit taking. However the market was resilient as offshore inflows appeared again and buying aggressively in the market on all tenors, while local investors also bought especially in longer end (15- to 20-year) of the curve. We expect the market will continue its positive momentum going forward, with some breather may appear along the way for some profit taking action. Market volume decreased to IDR13.4 trillion.