- US Treasuries consolidated on Wednesday, strengthening in the early session after the recent sell-offs. However, late in the session saw UST weakening again after the release of lower EIA inventories data and weak auction of 10T. Overall, UST yields rose 1-2bps for the day. The 10T auction worth $23 billion showed bid-to-cover ratio of 2.33x or lower versus 2.48x at the 10T auction held last month. High yield was 2.400% but there was a tail at the auction and direct bidders ended up a with a high 34.2% of the amount sold (29.5% last month) and indirect bidders (which include foreign central banks) at a lower 60.7% (65.2% last month).
- Malaysian sovereign bond market was closed on Wesak Day. Ringgit bonds were marginally weaker this week, in conjunction with higher USD/MYR (hovered at 4.3470 late Tuesday). Expect cautious sentiment ahead of MPC meeting slated for Friday. Meanwhile, players are also eyeing the industrial production data on Thursday, which is expected to expand by 4.8% yoy in Mar.
- In Jakarta, volume traded was thin on Wednesday as some South East Asian countries celebrated Vesak Day. IndoGBs were traded down on Dollar bullish tone, and only locals showed defensive bids in bond market, causing yields to close up 11-13 bps on average. We believe market remains resilient thus supportive buyers will be seen in event of sell-off again. About 52% of traded bonds were those maturing in over 10 years and total volume decreased to IDR10.8 trillion.