On Wednesday, US Treasuries showed mild gains amid a lack of market drivers but players still await a batch of pertinent macroeconomic ahead of the Christmas break. Wed

Market Roundup

• On Wednesday, US Treasuries showed mild gains amid a lack of market drivers but players still await a batch of pertinent macroeconomic ahead of the Christmas break. Wednesday saw release of existing home sales exceeding expectation at +0.7% mom in Nov (-1.8% consensus). Later this week we have final reading of 3Q2016 GDP, PCE inflation, durable goods, personal consumption, new home sales and the weekly jobless claims data.
• Ringgit govvies were generally supported alongside upticks in crude oil prices. However, volume was thin at RM1.2 billion, awaiting the 2017 government securities auction calendar. Meantime, there was little reaction as CPI rose by 1.8% on yoy basis in Nov, higher than 1.5% growth projected by economists earlier.
• Thai government bonds marginally weakened week, amid guarded sentiment awaiting MPC meeting, in conjunction with a long-dated LB666A auction. The LB666A auction saw subdued demand with a bid-to-cover ratio of 0.63 times for an issue size of Bt7.6 billion, lower than Bt14.0 billion indicated earlier. Average yield generated at 3.6634%, within a spread of 3.6250-3.6900%.
• Bank of Thailand left its policy rate unchanged at 1.50%, in line with market expectation. Policymakers continued to see similar economic growth pace as projected earlier, but pointed to increased downside risks due to possible weaker-than-expected growth in Thailand’s trading partners, uncertainties in US trade policies as well as potential lower-than-expected turnout by Chinese tourists. Furthermore, inflation was expected to rise gradually in 1Q2017, but largely dependent on the price movement of oil and fresh food.
• Indonesian government bond market was choppy on Wednesday as the market didn't have clear market drivers. Players showed bidding interest generally but some bids were lower compared to Tuesday, in line with higher UST yields. Buyers were more inclined to bid for shorter dated bonds. We think market may remain choppy nearing holiday season. Market was dominated by bonds maturing in between 1 and 5 years (54%).