Local bonds continued to be very well bided today in tandem with global yields dropping further down south to new record lows; UST 10Y touching 1.375%. 3Y MGS benchmark trading < 3% while the 5Y MGS trading at OPR level.

Today’s trade recap by our trading desk:-
·         Local bonds continued to be very well bided today in tandem with global yields dropping further down south to new record lows; UST 10Y touching 1.375%. 3Y MGS benchmark trading < 3% while the 5Y MGS trading at OPR level. Buying focus concentrated in the 7Y and 10Y GII space today on very thin volume as spread against the MGS counterparts are wide. The market breaks off for a 2 day holiday in conjunction with Hari Raya festives.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 2.980 -3.0 61 5-yr 3.250 -2.5 53 7-yr 3.535 -2.5 83 10-yr 3.685 -1.0 22 15-yr 4.055 -1.0 24 20-yr 4.260 0.0 14 30-yr 4.580 0.0 110 Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.500 0.0 3-yr 3.510 +0.5 5-yr 3.580 +1.5 7-yr 3.695 0.0 10-yr 3.865 +1.5 Source: Bloomberg, AmBank
Local News:
·         The international reserves of Bank Negara Malaysia amounted to US$97.2 billion as at 30 June 2016. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.2 times the short-term external debt. The decline in reserves level in USD terms mainly due to quarterly adjustment for foreign exchange revaluation changes.