US Treasuries market was closed for Thanksgivings. This morning as Asia opened UST yields were showing a slight rise with players still pricing in inflationary outlook

Market Roundup

• US Treasuries market was closed for Thanksgivings. This morning as Asia opened UST yields were showing a slight rise with players still pricing in inflationary outlook and USD pretty strong. A Fed favorite gauge for inflation, the 5y5y forward break-even rate, is near its highest since Aug last year around levels 2.5340%.
• The USD remained strong (on the back of macro data and Fed meeting minutes) with the DXY coming down to around 101.70 as Asia opened after rising above 102.00 (102.05 overnight. EUR/USD is around 1.0546 this morning whilst GBP/EUR remained firm around 1.1793. EUR faces some short term political risks with GBP receiving some short in the arm recently on budget expansion plans by Chancellor Hammond. Short term risk on Euro is the Italy’s constitutional referendum.
• MYR government bonds yields and IRS rose amid the weak Ringgit. As USD/MYR found itself above 4.4670, MGS yields rose as much as 10bps on the front end of the curve. We heard foreigners were net sellers but overall volume was not too heavy around RM3.0 billion.
• We look towards announcement for reopening auction of the 10-year MGS (MGS Nov’26), which could see tender size as much as RM3.0 billion.
• Thai govvies bonds also weakened but found support with foreign investors being net buyers of Bt2.2 billion of THB denominated papers on Thursday. On a day when Asian fx came under further pressure from a stronger USD, THB was heard around 35.664 late in the day versus 35.555 a day prior. Today we look towards release of foreign reserves for the week ended 18 Nov.
• IDR government bonds market experienced net selling pressure again as USD/IDR rose above 13500 on Thursday. It was basically a one-way market with net sellers eager to reduce risks. BI emerged before lunchtime, decided to have a buyback auction for benchmark series in the 5-, 10- and 20-year tenors. From IDR4 trillion incoming offers, BI bought IDR1.08 trillion. However local investors started to show bids late Thursday but the market traded in range until close.