MY Fixed Income Outlook 2017: Reversal of Trump Tantrum?

MY Fixed Income Outlook 2017: Reversal of Trump Tantrum?

·         Our outlook on MGS is raised to mildly positive from mildly bearish before the Trump Tantrum, in line with the view we expressed at the Maybank Global Market Outlook event on 29 Nov.

·         Foreign outflows from domestic debt securities in November was the largest on record, but with teething signs of stabilisation of late. We expect the ECB to extend its bond purchase programme, and the US Fed to deliver a fully-priced in 25bps FFR hike next week while steering market to a gradual pace of increase in 2017. 

·         Domestic fundamentals remain supportive, and we think the risk-reward proposition is more favourable after the large selloffs. We expect the 10y MGS yield to return to sub-4.00% level by end-1H2017.