- US Treasury yields showed further upticks, alongside a decent inflation number reported on Tuesday. On the other hand, Dallas Fed President Robert Kaplan stated that the policymakers should hike rates in a “gradual and patient manner”, while the US GDP growth was disappointing for the first half of the year.
- Malaysian sovereign bonds were dealt on weaker tone, amid profit taking pressure. Aside, daily volume was relatively thin at RM2.0 billion, in contrast to RM2.5 billion a day prior. We reckon that players will stay at the sidelines, ahead of Friday’s US NFP release. On the other hand, the central bank announced the reopening auction for 7-year MGS, with an issue size of RM3 billion. WI was last heard at 3.45/39%.
- Thai govvies closed marginally weaker amid light trading activities ahead of MPC meeting, as daily volume dropped significantly to Bt12.0 billion, from Bt23.7 billion registered earlier the week. On the other hand, USD/THB moved in a narrow range in between 34.73-34.84 throughout the day.
- Indonesian government bond market traded in range prior to bond auction on Tuesday. The auction received IDR45.9 trillion incoming bids and government decided to upsize the issuance to IDR18 trillion from initial target of IDR12 trillion. Post auction, bonds traded up aligning with the average win yield on the auctioned series (5-, 10- and 15-year). The 10-year FR56 was traded heavily after the auction, as bid-to-cover ratio was 3.89, with incoming bid reached IDR16.7 trillion, sending the 10-year bond yield down by 8bps to 6.78%. Market volume doubled to IDR18.3 trillion and dominated by bonds maturing in over 10 years (62%).