The US Treasuries curve mildly steepened and trading closed within a small range of +/- 1-2bps amid mixed-to-stronger economic data releases as well as lower crude price. There

Market Roundup

• The US Treasuries curve mildly steepened and trading closed within a small range of +/- 1-2bps amid mixed-to-stronger economic data releases as well as lower crude price. There was little influence from risk-taking with global stock markets rebounding from prior weakness post Italian referendum. US factory orders rose 2.7% in Oct against earlier consensus expectation of +2.6% and Sep’s +0.6%. However, sentiment was guarded with the US trade deficit falling to $42.6 billion in Oct (highest since Mar 2015) from $36.2 billion in Sep. US durable goods orders rose by a much larger 4.6% in Oct versus +3.4% consensus expectation.
• On Tuesday, US dollar was firm against other major currencies whilst crude prices retreated after hovering above $55 per barrel Monday. USD was supported by mixed-to-stronger economic data releases with EUR contained ahead of ECB meeting Thursday. The ECB meeting is expected to signal direction of current quantitative easing program, with some speculation of extension by another six months of asset purchases up to Sep 2017. There’s also speculation ECB will widen the types of assets to be qualified for purchases as part of the program to pare down on interest rates.
• Ringgit sovereign bonds closed mixed on improved sentiment in conjunction with mild recovery in MYR (USD/MYR dipped a tad and hovered at 4.4355 late Tuesday). Aside, WI for the 20-year GII reopening was heard near 4.99%.
• Thai government bonds weakened after the market reopened post the long weekend. Meantime, USD/THB moved within a narrow range, traded around 35.63 on Tuesday. We expect secondary trading to see sustained pressure in the near term, particularly on the long tenures, driven by UST movement and ahead of more primary supplies in the month of Dec. Foreigners continued to trim Thai bonds for the third consecutive session, but with a much lower volume, totaling Bt47 million, in contrast to Bt1.1 billion last Friday. Aside, the next and last BoT MPC meeting for 2016 comes only on 21 Dec. Consensus expectations remain that BoT will hold the policy rate at 1.50%.
• In Jakarta on auction day, MoF targeted to issue IDR6.2 trillion and as expected received high incoming bids (IDR29.3 trillion). Yet, the government didn't upsize at all as the 2016 budget target has been reached with IDR6.2 trillion of issuance. The IDR bond market rallied after the auction result was announced on the back of short covering. Market remained biddish up to 4pm, and some net selling action appeared afterwards causing the rally to stop at current levels and remained there until close.