- US Treasury yields continued to climb, amid risk-on appetite along with stock market gains, boosted by the higher inflationary outlook awaiting announcement of President Trump’s tax plan. Aside, a New York Fed survey showed that US households are expecting inflation to rise to 3.0% a year from now, in contrast to 2.8% registered in previous month.
- Ringgit government bonds posted losses, tracking higher UST yields after the US president signaled for tax plan announcement in the coming weeks. Elsewhere, highlight will be on the new 7-year GII auction slated for 14 Feb, where the WI was last heard at 4.12/02%, or tighter than 4.13% quoted on last Friday. Apart from that, economic data on tap this week will be the 4Q2016 GDP report, scheduled on 16 Feb. Markets are eyeing a 4.4% yoy growth for the final quarter of last year.
- Indonesian govvies were traded down in price ahead of today's bond auction. Some players tried to trim off some benchmark series that will be auctioned, but were met by strong bidders that were very eager to support the market. We think the auction will attract solid demand especially on SPN bills and 10-year benchmark series. MoF targets to issue IDR15 trillion in the auction. Monday’s volume halved to IDR5.8 trillion only.