Market Roundup
US Treasuries. Yields continued to trend higher amid improved risk appetite. In data release, the Aug PPI was +0.2% mom, below consensus +0.3% mom, but made little impact on the market. The $12 billion 30T auction saw relatively soft demand with 2.21x bid-cover, versus average 2.28x in past 12 auctions. High yield was 2.79%. Adding pressure was Congress' tax reform legislation plan.
Malaysia. MYR bonds were dealt firmer, along with stronger MYR, while we suspect flows to be driven by offshore interest. Trading was slanted towards the front end, including MGS Sep'18 and Oct'17, and GII Jul'27. As for the 5-year MGS, WI was heard quoted marginally wider at 3.52/50% on Wednesday, and 3.52/48% this morning. Tender closes today.
Thailand. Government bonds moved sideways in tight range following a well received 5-year LB226A auction which average yield dipped 1bps to 1.77% and bid-cover 2.4x. Outright activities appeared low at Bt87.77 billion as investors awaited tomorrow's Thai PDMO market dialogue for FY18. Foreign investors continued to maintain net buy of Thai bonds at Bt8.11 billion on Wed and Bt2.14 billion belonged to front-end net purchase.
Indonesia. IndoGB market was relatively quiet as it consolidated at current levels. Locals provide supportive bids, accumulating bonds although not aggressive. Market gradually traded up on 10- and 15-year tenors but volume was not sufficient to lift market higher. Volume decreased to IDR15.2 trillion and dominated by bonds maturing in between 1 and 5 years (43%) and also bonds maturing in over 10 years (34%).
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