Market
Roundup
- US Treasuries strengthened on the back of lower crude oil and equities prices, in conjunction with weaker-than-expected economic data releases ahead of the weekend. Brent crude oil settled lower at $43.10/bbl on Friday. The oil producers’ meeting held in Doha reportedly ended with no agreement to freeze output.
- Malaysia’s sovereign bond market was relatively quiet with daily volume totalling RM1.9 billion last Friday. Players were staying along the sidelines, awaiting the outcome of the Doha oil producers meeting.
- Indonesian government bonds were dealt firmer in early hours on Friday following IDR spot appreciation and improvement in the country’s trade balance data. We have seen mixed flows on benchmark series particularly FR53 and FR56. However, the strong buying interests was later subdued as local interbank came in for profit taking activity. There has not seen yet any effect to the bond market from plans to restructure the BI policy rate. BI has confirmed it will use the 7 day reverse repo rate as the new policy rate effective on 19 Aug 2016, though we think the new reforms will be positive to the bond market. Market volume was steady amounting to IDR10.8 trillion. Most heavily traded papers were those maturing over 10 years (47%) and 1-5 years (28%).
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