US Treasuries. UST were dealt firmer, reacting to several central bankers' speeches plus amid safe haven demand due to geopolitical risks. New York Fed president Dudley said that Fed remains on gradual tightening path given factors depressing inflation is fading, whilst Chicago Fed president Evans sees rate to be raised gradually to around 2.7% over next two years, but he was concerned by the low inflation. ECB president Draghi said central bank is more confident inflation will eventually reach target, but outlook remains uncertain amid recent volatility in EUR.
Malaysia. MYR bonds posted gains after the long weekend on the back of renewed political tensions triggered by North Korea. Activities were slanted towards 5- and 7-year MGS, where the 5-year MGS dipped by 5bps on Monday, paring previous week losses.
Thailand. External environment and local factors favored Thai bonds before the MPC meeting. Moreover, Thai bond supply stays light for another week without new LB issuance amid firm demand from local funds. Therefore, Thai GB curve moved lower Monday with yield declining about 2bps-5bps on the belly.
Indonesia. IndoGB prices gapped higher as market price in unexpected BI 7-day reverse repo rate cut by 25 bps. BI also held 9- and 12-month SDBI auction on Monday, with cut-off at 5.25% and 5.33%, respectively, and fell 30bps from auction before rate cut. Bonds opened biddish and curve fell 15-18 bps by midday, before profit taking eventually emerged. MoF will be holding IDR sharia bond auction tomorrow with IDR5 trillion target, expect demand to be solid.
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