US Treasury yields rose amid profit taking pressure and players taking in Fed’s signals it remains on normalizing path this year. We reckon there was some profit taking activities post FOMC, particularly after the 10T fell to near 2.10%. On a separate note, Bank of England held its policy rate unchanged at 0.25%, in line with market expectation. However, gilt yields rose reacting to the surprise voting o

Market Roundup

• US Treasury yields rose amid profit taking pressure and players taking in Fed’s signals it remains on normalizing path this year. We reckon there was some profit taking activities post FOMC, particularly after the 10T fell to near 2.10%. On a separate note, Bank of England held its policy rate unchanged at 0.25%, in line with market expectation. However, gilt yields rose reacting to the surprise voting outcome (three of the policymakers voted for a rate hike, compared to one previously).
• Malaysia: MYR govvies were traded on firmer tone with USD/MYR opened lower near 4.2500. However, gains were eventually pared, while the currency pair edged higher and hovered at 4.2675 late Thursday. Trading activities were slanted towards the short to medium term GII papers namely GII Apr’19, Aug’19 and Jul’27. The 10-year GII was dealt slightly tighter at 3.99%, from 4.02% a day prior, following the tender with an average yield of 4.013%.
• Thailand: Thai bonds rallied with UST post Fed hike but amid softened path of US inflation. Thai govvies curve fell 3-6bps in the intermediates and long-end and benchmark 5-year LB226A, 10-year LB26DA, 15-year LB316A, and 20-year LB366A touched 1.95%, 2.41%, 2.90%, and 3.08% late Thursday. Offshore demand for long-term bonds remained solid at Bt2.96 billion net buy positions on Thursday. Next catalyst is the announcement of destination bonds for the debt switching program on 19 Jun. Thus, there is a possibility of upward pressure on longer term yield and this is a good opportunity to buy Thai GB on dips.
• Indonesia: IndoGBs strengthened on the back of risk-on mode post FOMC meeting. Offshore buying flows were seen quite heavy on the bellies to the long end. Bidders were met by profit takers though, limiting the upside. As expected, BI kept its 7-day reverse repo rate unchanged at 4.75% with neutral stance on policy outlook. Aside, government announced the 15th economic policy package, targeting to improve national logistics to boost investments.