Friday, April 14, 2017

The market today was driven by comments from US President Donald Trump overnight. He mentioned during an interview that he won’t label China as currency manipulator; favoring low interest rate policy as well as wanting a weaker USD which is better for bus


Good Evening,

Today’s trade recap by our trading desk:-

·         The market today was driven by comments from US President Donald Trump overnight. He mentioned during an interview that he won’t label China as currency manipulator; favoring low interest rate policy as well as wanting a weaker USD which is better for business. These comments was a 180 degree turn from what he mentioned before and it sent yields tumbling further and USD weakening further. UST10y is trading at year to date low of 2.225% levels, 8 bps lower from the day before. The local market today started softly but the pace picked up during the afternoon session after a strong 5y GII auction. The new 5y GII auction closed with a very strong BTC of 2.773x, averaging 3.948 and RM4.0bio issued. Post auction, the stock was taken lower than auction low and settled at 3.90% level; in tandem with buying flows seen across other MGS benchmarks. Yield curve ended the day 2.5-3.5 bps lower and MYR traded stronger at 4.4180 levels.


Malaysia Government Bonds Benchmark Issues
MGS
Closing Level (%)
Change (bp)
Volume (RM m)
3-yr
3.515
-2.5
178
5-yr
3.820
-2.0
11
7-yr
4.020
-3.0
-
10-yr
4.100
-3.5
298
15-yr
4.495
-2.5
90
20-yr
4.785
-0.5
9
30-yr
4.835
-
-
Source: BondStream, AmBank
Interest Rate Swap Closing Rates
IRS
Closing Yield (%)
Change (bp)
1-yr
3.550
+0.5
3-yr
3.692
-1.3
5-yr
3.820
-2.5
7-yr
3.925
-1.5
10-yr
4.070
-1.0
Source: Bloomberg, AmBank

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