Fixed Income Daily Pulse, 30 May 2016

Good evening!
Today’s trade recap by our trading desk:-
·         The week started with a very weak auction for the new RM4.0bio 5Y MGS issuance which saw a BTC of 1.420x only and averaging at 3.620%. This is probably due to the bank holidays in both US and UK in which foreign participation was low during the auction. Many traders also stayed on the sidelines after Yellen’s hawkish comments last Friday, indicating that higher rates may be warranted over the next few months. As a result, the market was also tilted bearish, seeing some selling pressure on the belly of the curve in the afternoon, with particular focus on the 5-10Y MGS benchmarks. MYR also closed weaker today by 350pips at 4.1150 level as yield curve gained 2-6bps across.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 3.265 +1.0 60 5-yr 3.665 - 1130 7-yr 3.840 +4.0 295 10-yr 3.935 +3.5 390 15-yr 4.250 +2.5 0 20-yr 4.350 +2.0 - 30-yr 4.705 +2.0 150 Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.618 +1.8 3-yr 3.625 +2.5 5-yr 3.740 +3.5 7-yr 3.900 +4.5 10-yr 4.060 +4.0 Source: Bloomberg, AmBank
Local News:
·         None.