Tuesday, October 25, 2016

Post budget last Friday, sentiments in the local bond market improved as some of the losses at the back end of the curve last week was pared. GII space also started the week with strong buying flows especially


Good Evening,

Today’s trade recap by our trading desk:-

·         Post budget last Friday, sentiments in the local bond market improved as some of the losses at the back end of the curve last week was pared. GII space also started the week with strong buying flows especially on the 7Y and 10Y GIIs benchmarks, driven by foreign demand. The GII curve saw a parallel shift downwards by 4-5bps while the MGS curve eased by 2-5bps with focus on the back end. The inclusion of 2 GII benchmarks into JP Morgan’s EM index beginning end of this month possibly contributed to the rally in GII space today. However, traded volume was rather soft in the MGS space. With strong flows in the bond market, the MYR strengthened today to 4.1750 levels.


Malaysia Government Bonds Benchmark Issues
MGS
Closing Level (%)
Change (bp)
Volume (RM m)
3-yr
2.990
-1.0
0
5-yr
3.310
-2.0
37
7-yr
3.500
-4.0
65
10-yr
3.595
-2.5
20
15-yr
4.040
-5.5
134
20-yr
4.295
-4.0
1
30-yr
4.570
-1.0
1
Source: BondStream, AmBank
Interest Rate Swap Closing Rates
IRS
Closing Yield (%)
Change (bp)
1-yr
3.345
-2.0
3-yr
3.400
-3.0
5-yr
3.535
-5.5
7-yr
3.715
-4.0
10-yr
3.960
-3.5
Source: Bloomberg, AmBank

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