US Treasury yield curve ended lower and flatter, along with lower crude oil prices during mid-week. Brent crude settled lower at $53.00/bbl, after hitting the recent high at $54.94/bbl earlier this week. On the flipside, risk-on sentiment remained inta

Market Roundup

• US Treasury yield curve ended lower and flatter, along with lower crude oil prices during mid-week. Brent crude settled lower at $53.00/bbl, after hitting the recent high at $54.94/bbl earlier this week. On the flipside, risk-on sentiment remained intact, with DJIA reached the fresh high at 19549 on Wednesday.
• Malaysian sovereign yield curve ended lower, supported by buying-on-dips interest along with Ringgit recovery. The 20-year GII reopening auction was well received, indicated by bid-to-cover ratio of 3.75 times for a relatively small issue size of RM1.5 billion. Average yield generated at 4.811%, within 4.768-4.850%, and way lower than WI level 4.99% quoted before the tender close.
• Thai sovereign yield curve ended steeper during mid-week, with sustained pressure on the longer term papers. On top of that, new primary supplies also added pressure to the Thai govvies. The Bt15 billion LB316A auction saw poor demand as widely expected. Bid-to-cover was 0.67 times, along with average yield of 3.2163%. Expect yield curve to remain steep ahead of FOMC meeting next week.
• Indonesian govvies continued its rally on Wednesday, as market was biddish from the start of the day with buyers came back and drove market higher again. Buyers were very keen to bid bonds in 5- and 10-year buckets, sending 5-year yield down by 34 bps and 10-year yield down by 19 bps, while the rest of the curve went down around 13-15bps. We think Indonesian govvies will be prone to profit taking since the yield curve came down by 40-50 bps in only 2 days. Market volume reached IDR16.6 trillion and was dominated by bonds maturing between 1 and 5 years (38%).