- US Treasuries hovered near prior levels, but short dated yields continued to climb on the back of cautious trading heading into FOMC meeting. Meanwhile, economic data releases were generally positive, but made little impact to the market. New home sales recorded at 592k in Jun, above consensus 560k, whilst Consumer Confidence index registered at 97.3 for the month of Jul, higher than 96.0 forecasted earlier.
- Malaysian sovereign bonds were moved in mixed directions, but sentiment remained guarded following the persistent weakness in MYR. USD/MYR gapped higher and peaked near 4.0900, but was subsequently pared lower and ended at 4.0635. We expect short term consolidation heading towards FOMC and BoJ meeting, whilst seeing potential buying-on-dips interest amid speculation of further easing by central bank later this year.
- Thai govvies remained weak amid heavier trading flows (daily volume increased from Bt11.2 billion to Bt15.8 billion) on Tuesday. We think that incoming supply from the reopening auction of LB316A also added pressure to the market, pairing with cautious sentiment ahead of FOMC and BoJ meetings later this week.
- Indonesian government bond market traded firmer following a successful IDR Syariah bond auction. Government received IDR21.35 trillion worth of incoming bids (highest all-time), and upsized the issuance to IDR5.42 trillion from IDR4 trillion initial target. Buying flows were seen especially after the break, with both locals and foreign names seen in a biddish market. Market volume surprisingly decreased to IDR8.2 trillion, relatively low considering it was an auction day. Trading was dominated by bonds maturing in over 10 years (59%) and bonds maturing between 1 and 5 years (24%).