- US Treasury yields inched higher across the curve as risk-off sentiment continued to ease early this week. On top of that, Brent crude oil was seen trading at the higher range around $54 per barrel overnight, aided in pushing the yields slightly higher. Apart from Trump political concerns, players focus on possibility of slower Fed rate hike pace heading towards the Jun FOMC.
- Malaysia: Government bonds pretty much mixed on reportedly thin volume. It seems short term, offshore interest is slanted towards IDR bonds after the S&P upgrade. Lower USD/MYR (hovering near 4.3050 late Monday) also did little to move interest. The 5-year IRS rate little changed.
- Thailand: The bonds retreated Monday with yields higher 1-2bps in a bear-steepening move. This may be explained by risk-on rally in the equity market underpinned by surging WTI oil price to $51 per barrel from expectation of a supply cut agreement at the OPEC meeting on Thursday. Likewise, bidding yield of LB316A rose 2bps to almost 2.17% and we believe the current price is an attractive buy as long-end yields may correct lower if the MPC statement on Wednesday or the Fed minutes turns more dovish than expected.
- Indonesia: Although IndoGB opened quite biddish on Monday, upside looked limited amid the bond auction today. With local players taking profit, overall IndoGB were traded down especially along the bellies to long end. MoF will be holding IDR bond auction with IDR 12 trillion target, less than usual IDR15 trillion target in past auctions. Series auctioned will be 3m & 9m SPN bills, and 10-year FR59, 15-year FR74, and 20-year FR72 bonds. We think demand will be solid in the aftermath of the S&P upgrade. Total volume increased to IDR21.4 trillion and most traded bonds were those maturing in over 10 years (45%).