US Treasuries. US Treasuries pared earlier losses triggered by renewed Dec hike anticipation, aided by flows for safe haven assets amid escalating geopolitical tensions against North Korea. In addition, US jets were reportedly flying over waters east of North Korea during the weekend. Elsewhere, San Francisco Fed president John Williams expects interest rate to be gradually raised over next few years, with earliest in Dec this year.
Malaysia. MYR sovereign bonds weakened last Thursday, tracking UST losses post FOMC, and the Aug CPI release. Meanwhile, flows were led by short to medium dated papers, including MGS Mar'22 and Nov'27. As for upcoming 15-year GII reopening, we expect issue size of RM3 billion.
Thailand. Thai GB curve bull flattened as mid-end and long-end papers fell 2-3bps amid local interest. Demand for inflation linked bond (ILB) 217A strengthened with last bids at 1.46%. Meantime, profit taking from foreign players was noted along the front-end bond. Foreign investors were net buyers of long-term papers at Bt2.76 billion and sellers of short-term bond at Bt625 million. There will be no LB auction in this week and light supply will decrease downside risk.
Indonesia. Government bond market opened weaker Friday post FOMC. However, market was supported afterwards on the back of some buying flows, might be making a play for possibilities of BI rate cut. Buyers were more aggressive in afternoon session ahead of BI meeting, mostly chasing for benchmark bonds in 10y-20y tenors. In any case, BI cut rates to 4.25% late Friday http://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_197317.aspx.
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