Friday, March 10, 2017

· In the overnight market, UST slumped on the back of ADP employment data coming out much higher than expected at 298k vs 190k exp. The 10Y yield rose to a high of 2.57% while USD strengthened as well, indicating an upside risk for Friday’

Today’s trade recap by our trading desk:-

·         In the overnight market, UST slumped on the back of ADP employment data coming out much higher than expected at 298k vs 190k exp. The 10Y yield rose to a high of 2.57% while USD strengthened as well, indicating an upside risk for Friday’s NFP. Subsequently, the local market continued its bearish trend, with the yield curve rising 2-5bps across today on the back of paper thin trades. Main focus in the market today was the new 5Y MGS auction with RM4.0bio issued. It closed with a rather weak BTC of 1.538x and averaging at 3.882%. post auction, the new stock saw minor selling pressure and ended the day around auction higher level of 3.905%. Expect market players to be on the sidelines until FOMC is over next week, with NFP due for release tomorrow as well.


Malaysia Government Bonds Benchmark Issues
MGS
Closing Level (%)
Change (bp)
Volume (RM m)
3-yr
3.450
-
34
5-yr
3.905
+2.5
19
7-yr
4.155
+5.0
82
10-yr
4.205
+3.5
23
15-yr
4.605
+4.5
12
20-yr
4.750
+2.0
-
30-yr
4.865
+1.5
-
Source: BondStream, AmBank
Interest Rate Swap Closing Rates
IRS
Closing Yield (%)
Change (bp)
1-yr
3.545
1.5
3-yr
3.693
0.7
5-yr
3.870
2.0
7-yr
3.965
0.0
10-yr
4.130
2.0
Source: Bloomberg, AmBank

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