Friday, February 17, 2017

US Treasuries posted gains but we suspect mainly on bargain hunting interest as macro

Market Roundup
  • US Treasuries posted gains but we suspect mainly on bargain hunting interest as macro data was scarce and sentiment, albeit mildly, is still mainly dampened by recent Yellen’s hawkish remarks (to Congress). In macroeconomic data, housing starts was 1246k seasonally adjusted annual rate in Jan, against 1226k consensus.
  • Malaysian sovereign bond yields ended little changed on Thursday. Sentiment was slightly on the positive side, supported by the stronger-than-expected 4Q2016 GDP data, which pointed to a growth rate of 4.5% yoy, above +4.4% yoy projected earlier. On the flipside, daily volume was heavier at RM3.9 billion, increased from RM2.4 billion registered on Wednesday, while flows were led by MGS Sep’18 and Jun’31.
  • Thai govvies were quite stable across the curve and yields fluctuated in a tight range of 1bp. Despite a rally in UST, LB yields did not react higher as investors may wait and see the Thailand GDP on Monday and details on Trump's fiscal stimulus. Foreign investors were net sellers of Thai bond for the first time in the week at Bt919 million on Thursday after hawkish Yellen comments and better-than-expected US CPI.
  • IndoGB were traded slightly firmer following the better-than-expected Jan trade balance numbers ($1.4 billion against $823 million expectation and $992 million prior month)). Market bids were strong but most of the buying action happened after the London open. BI held its monthly meeting yesterday and held the 7-day reverse repo rate steady at 4.75%.

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