- US Treasuries moved in sideways, reacting to hawkish Fed member’s comment, alongside with lower crude oil prices, but ended with little changes on Friday. Brent crude oil fell by more than 3% to $45.89/bbl as market perceives that the oil producers will not be able to strike a deal in output freeze during the upcoming meeting.
- Ringgit government bonds closed mixed, amid thinner flows amounting RM2.9 billion on Friday. We think that players will be eyeing on the oil producers’ meeting scheduled on 26-28 Sep, in which they could discuss output levels. Apart from that, we reckon that the improved sentiment post FOMC will attract demand for Ringgit bonds in the coming week. Highlight will be on the 20-year GII auction, which we expect to be announced with an issue size of RM2.0-2.5 billion.
- Thai govvies further strengthened, but gains were capped by profit taking pressure heading towards weekend. Elsewhere, trading flows remained concentrated on short dated papers such as LB226A and LB196A, but daily volume shrank substantially to Bt9.2 billion on Friday, in contrast to Bt29.8 billion a day prior.
- Indonesian government bond prices were basically unchanged following BI decision to cut 7-days reverse repo rate. Market players seem to be patient ahead of Tuesday's bond auction, whilst trading activities were dealt mostly on benchmark series on Friday. Market volume jumped to IDR15.3 trillion and dominated by bonds maturing between 5 and 10 years (38%).