US Treasuries posted gains as oil prices remained relatively low with Brent around $46.34 per barrel on doubts the OPEC members’ meeting will see agreements for output cutbacks. The

Market Roundup

• US Treasuries posted gains as oil prices remained relatively low with Brent around $46.34 per barrel on doubts the OPEC members’ meeting will see agreements for output cutbacks. The second reading of the 3Q2016 US GDP showed a larger-than-expected growth of 3.2% versus +3.0% consensus and initial reading of +2.9%. The Conference Board's Consumer Confidence index rose to its highest level since Aug 2007 at 107.10 in Nov from 100.80 in Oct.
• Players face short term risk events and macro data releases. On top of OPEC members’ meeting another risk event in the short term period is Italy’s constitutional reforms referendum 4 Dec. We also await the Nov NFP with consensus expectation of a higher 108k rise from +161k in Oct.
• USD continued to consolidate with the DXY down below 101.00 at 100.93, even despite the better-than-anticipated second reading in 3Q2016 US GDP. Elsewhere, the yuan firmed but remains near a decade low as authorities reportedly sought to limit takeovers of foreign companies to cap capital outflows. On Tuesday, the PBOC set the midpoint of the currency trading band at 6.8889 against the USD.
• Ringgit sovereign bond market saw mixed trading interest, with pressure sustained as USD/MYR remained at the higher range above 4.4600. However, players continued to show bargain hunting interest, tracking the stabilizing UST.
• There was moderately firm demand for the RM2.0 billion 10-year MGS (MGS Nov’26) reopening auction held on Tuesday. Bid-to-cover was 2.654 times, supported by current buying-on-dips along the secondary segment. Average yield generated at the auction was 4.465%, within a spread of 4.430-4.485%, and wider than WI 4.44/40% quoted a day prior the tender close.
• Thai govvies were dealt a tad firmer, supported by net buying interest on the back of stabilizing UST. Meantime, trading activities were slanted towards short and medium dated papers, amid heavier daily volume totaling Bt6.1 billion, higher than Bt4.4 billion registered a day prior. Highlight will be on LB466A auction scheduled on Wednesday.
• Despite late profit taking pressure, IDR government bonds were traded firmer on improved sentiment from both from locals and foreign players with focus on the bellies to longer end of the curve. Yields fell 8-12bps on the 5- to 15-year benchmarks causing a flatter yield curve.