US Treasuries mildly recovered, supported by bargain-hunting activities, while players are

Market Roundup

• US Treasuries mildly recovered, supported by bargain-hunting activities, while players are waiting for the Nov FOMC meeting minutes and other economic data releases for direction. The 10T yield edged lower to 2.32%, after hitting a high at 2.36% late last week. The Nov minutes could give fresh signals towards Fed’s future direction whilst macro data awaited include durable goods orders, Michigan sentiment index and house prices.
• FX market saw some correction after the greenback had substantially strengthened post US election. EUR/USD edged higher from recent lows (below 1.0600). USD/JPY moved in sideways before it ended marginally lower at 110.82 on Monday.
• Malaysian sovereign bonds closed mixed, amid improved sentiment which pressured the IRS rates 2-14bps lower across the curve. Meantime, the mild recovery in Ringgit (USD/MYR was traded near 4.3800 late Monday) also eased pressure on Ringgit bonds. Pending the MPC outcome, we think that the Ringgit bond market may see further pressure if the UST yields trended higher. We see the 10-year MGS resistance at 4.45% for now, while we expect next resistance at 4.55% for a break of 4.45%.
• Thai sovereign bonds hovered near prior levels, and closed a tad firmer on Monday, in conjunction with the weaker-than-expected 3Q2016 GDP data. In the third quarter the economy expanded by 3.2% yoy, lower than +3.5% yoy in the previous quarter, as well as +3.4% yoy forecasted earlier. On the flipside, IRS rates inched down by 1-2bps across the curve.
• Net selling pressure were seen in the Indonesian government bond market on Monday especially on the 5- and 10-year tenors, causing the sovereign yield curve to edge up on average by 3-4 bps, amid a quiet market. We think IDR govvies will remain volatile this week with persistent global market uncertainties. Market volume was IDR9.8 trillion and was dominated by bonds maturing in over 10 years (40%).