- US Treasuries bear steepened, as yields ticked higher on the back of positive jobs data on Friday. The non-farm payrolls showed total job print of 209k in Jul, above consensus +180k, while the unemployment rate inched lower from 4.4% in Jun to 4.3% Jul. On the other hand, average hourly earnings rose 0.3% mom in Jul, or meeting consensus and limiting the uptick in bond yields.
- Malaysia: Ringgit govvies posted mild gains awaiting US non-farm payrolls data. Flows remained concentrated on the front end of the curve. Notably, the short dated GII Jan’17 was dealt 15bps lower to 3.09%, along with -10bps move in MTB Nov’17 (last traded 2.97%). In economic data releases, Malaysia’s exports and imports expanded by 10.0% and 3.7% yoy respectively in Jun, lower than +18.3% and +19.8% yoy projected beforehand. The trade numbers translated into a trade surplus of RM9.88 billion during the month. The drop in trade was influenced by seasonal distortions surrounding the fasting month of Ramadan and Hari Raya. Friday’s better-than-expected NFP and weaker UST could prove negative for MGS in next 1-2 days. We’re eyeing 10-year MGS short term resistance at 4.05%.
- Thailand: Thai govvies fluctuated in tight range of 1bp in thin volume. Outright trading activities dropped 7% to Bt99.46 billion on Fri as players waited for the US jobs. Foreign investor sold long-term bonds Bt706 million but maintained total net-buy position at Bt2.68 billion. We expect foreign demand for buying front-ends maturing less than 1 month will slow as buying channel through FX market is not attractive after offshore T/N FX swap recovered to zero after several weeks of negative prints.
- Indonesia: IndoGBs initially traded in tight range in the morning session Friday with very thin volume. However the tone shifted positive in the afternoon after Bank Indonesia said there's a room to ease if inflation and Rupiah are manageable. Market was biddish thereafter and buyers were keen to buy benchmark bonds from 5-20 years maturity though still met by some profit takers ahead US jobs data. Yield curve moved lower 1-2 bps. Volume improved to IDR10.1 trillion and dominated by bonds maturing between 1 and 5 years (42%).