US durable goods orders came in exceeding expectations, at +4.8% mom in Oct against

Market Roundup

• US durable goods orders came in exceeding expectations, at +4.8% mom in Oct against consensus of just +1.7%. This pressured US Treasury yields upwards but a lack of participation ahead of Thanksgivings probably caused the lift in yields more than macroeconomic data. New home sales was 563k in the month of Oct against 590k consensus and Sep’s 574k which was revised down from 593k in a prior estimate.
• And UST was supported by strong demand at the $28 billion 7T auction seeing bid-cover of 2.68x against 2.49x at the 7T auction last month. High yield was 2.215%. Indirect bidders, which include foreign central banks, ended up with 72.7% of the auction (61.5% prior auction). Aside, the New York Fed changed the definition of a ‘primary dealer’. The capital requirement for non-bank broker-dealers is lowered to $50 million from $150 million. For bank broker-dealers, this is increased to $1 billion of Tier 1 capital from $150 million. Primary dealers are now required to make two-way markets in UST.
• USD/SGD is up to 1.4344 on strong Dollar. Amid global risks, Singapore reported better 3Q2016 GDP growth of +1.1% yoy but revised down its full year 2016 growth to 1-1.5% from prior projection of +2.0%.
• Ringgit govvies posted small gains. The market continued to see better receiving interest, pressuring medium to longer end IRS rates down by 4-7bps.
• As expected Bank Negara Malaysia maintained the OPR at 3.00%, citing the policy stance is appropriate at current situation, looking at the steady growth path and stable inflation. Elsewhere, policymakers said will continue to provide liquidity to ensure orderly functioning of domestic FX market. We reckon that the central bank sounded dovish, and may channel easing measures in the first half of next year.
• THB denominated sovereign bonds closed a tad firmer, but flows continued to shrink, as daily volume amounted to Bt3.5 billion, compared with Bt4.5 billion registered a day prior. Expect near term consolidation amid a lack of fresh positive catalysts. On top of that, we continue to see pressure on long dated papers, particularly ahead of the LB466A auction end of this month.
• Indonesian govvies further weakened Wednesday. Net sellers appeared to be concentrated on 7- to 10-year tenors, affecting yields on those buckets (up by 16-18bps), while other tenors were stable at current levels. BI came into the market, bidding 10-year bonds. Nearing closing hours, bidders also appeared along the 10-year tenors at current levels.