US Treasuries found relief Tuesday after the post-election rout

Market Roundup

• US Treasuries found relief Tuesday after the post-election rout though gains were tempered by advance retail sales exceeding consensus. Meantime, Fed governor Fischer remarked that liquidity in the market was adequate (amid reports of decreasing dealer inventories) and advised it’s too early to fully assess the current market fallout. On the other hand, governor Tarullo said there might be reasons for caution before hiking interest rates.
• USD halted its advance with DXY topping off at 100.26 before now hovering near 100.23. Even as retail sales showed stronger than expected increase in Oct, profit taking pressure still came in after the recent strong gains. EUR is at 1.0733 this morning. Euro Zone 3Q2016 GDP grew 0.3% qoq, meeting consensus and similar to the prior quarter’s growth.
• Ringgit govvies curve steepened amid interest on selected papers and a more stable MYR as well as lower US Treasury yields during Asian trading hours. IRS rates declined by 5-15bps across the curve, sending the curve lower and flatter.
• Thai govvies stood on stronger footing, guided by lower UST yields. However, daily volume shrank from Bt29.8 billion to Bt16.0 billion. Similarly, IRS rates ended lower by 4-12bps across the curve.
• Indonesian government bonds showed strength, opening with improved sentiment following UST gains. After firm Oct exports data (4.59% yoy actual versus 3.60% surveyed) and trade surplus ($1.2 billion actual versus $1.0 billion survey), market was well-supported with bids on all benchmarks. Nearing closing hours, better net buyers appeared especially in the 10- and 15-year benchmarks. Volume traded fell to IDR19.9 trillion and was dominated by bonds maturing over 10 years (39%) and between 5 and 10 years (31%).