US Treasuries. Treasuries ended with mild gains as players curtailed expectations an easy move to pass Trump's tax proposals. Meanwhile, the final estimate of the 2Q17 GDP came out at +3.0% or revised down from 3.1% prior estimate. Core PCE qoq was 0.9%. The 7T auction showed firm BTC of 2.7x and high yield of 2.130% against 2.140% WI. To look out for Friday is speech by FOMC voter Philadelphia Fed president Harker.
Malaysia. MYR govvies extended losses amid global bonds selloff. The weak sentiment also weighed on 15-year GII reopening (average yield was 4.579%, in contrast to WI offered at 4.48% a day prior, while BTC was 1.727x. Post auction, it further widened and closed at 4.61%. In our opinion, it appears to be attractive with UST yields settling lower from intraday-highs and should attract buying-on-dips at levels >4.60%.
Thailand. Curve steepened with 5-10y segments up 2-4bps amid large foreign sell-off at Bt13.76 billion of Thai bond as global yield was underpinned by Trump's tax plan. Meantime, local players especially asset managers and insurers had appetite for bonds and receiving fixed on IRS as yields in the belly and far-end reached the opportunistic buy levels.
Indonesia. IndoGB opened and looked offerish on USD strength after Trump revealed his tax plan. Bonds looked ready for a sell-off, and banks pushed yields higher by 11-13 bps. However when 10yr reached 6.63% level, market rebounded as local flows were strong. The market was biddish from that level until close, and losses were mostly recovered.
Asian USD credits. Asian dollar credit market saw selling pressure driven by upticks in UST yields. iTraxx Asia ex-Japan IG index was flat on Thursday. In primary space, Overseas Chinese Town's perp NC3 was guided at 4.35%. Expect to see mild recovery with selling pressure ease in UST ahead of long holidays in China.
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