Market
Roundup
- US Treasuries extended gains, along with mixed trading interest in stock markets, taking a breather ahead of Presidents Day holiday on Monday.
- FX market saw some correction ahead of the long weekend in US. USD/JPY settled lower at 112.84, extending losses after peaking above 114.00 earlier the week. Regional currencies moved in narrow ranges and ended flat on Friday, amid a lack of fresh catalyst. USD/SGD inched higher to 1.4185, while we see short term support level around 1.4100. As for Ringgit, expect today to be muted with the US markets closed. Dollar demand stemming from last week’s MGS maturity would have receded removing the downward pressure on Ringgit. The dollar had declined after breaking above 101.50 on Wednesday and the Ringgit is yet to follow suit. Malaysia GDP numbers were healthy last week combined with Dollar declines since midweek should see the Ringgit seeing gains today.
- Malaysian government bonds mildly strengthened, amid heavier trading flows amounting to RM4.3 billion on Friday, in contrast to RM3.9 billion registered a day prior. We await 30-year MGS reopening auction announcement this week, with target issue size of RM2.5 billion.
- Thai sovereign yield curve remained steady and in a tight range of 1bp in almost all tenors as investors waited for 4Q2016 Thailand's GDP report and US market would close on Monday. As global market development leans to bearish sentiment, Thai govvies maturing longer than 1-year received demand from foreign investor registering as a net-buyer at Bt1.07 billion on Friday.
- Indonesian govvies were traded in ranges on Friday. Activities centered on 10- and 20-year buckets, where local investors were keen to bid on 20-yearr off-the-run series, while banks focused more on 10-year benchmark bonds. We reckon the volume was relatively small. Market volume dropped to IDR14.8 trillion and dominated by bonds maturing in over 10 years (50%).
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