US Treasuries. UST showed mild weakness, yields higher about 1bp at the close. Some safe haven demand came amid the Spanish political risk and after the mass shooting in Las Vegas. Yields were lifted as the ISM Mfg index showed reading of 60.8 in Sep against 58.1 consensus and 58.8 in Aug.
Malaysia. MYR bonds continued weaken but flows were relatively thinner. Short term catalysts appear to be external, including Fed and US tax developments. However, big event this week is NFP. We maintain interest on short dated papers, seeing support for 5y MGS at 3.50% in short term period.
Thailand. Bond curve steepened as yields rose 5-6bps within 5-10y segment attributed to increasing inflation and higher UST yield. Thai headline CPI accelerated 0.86% yoy in Sep, the highest in 6 months and core CPI increased 0.53% yoy. USD/THB tested 33.40 high and foreign investors decreased position in short-ends by Bt4.05 billion. Outright trading activities were light at Bt68.77 billion as China market was closed and bond sell-off was likely to be limited among local players. Therefore, we expect marginal upside risk in yield among the belly and long-ends. Meantime, front-end bond is likely to experience a substantial sell-off risk until 1-year THBIRS reaches 1.50%.
Indonesia. IndoGB were traded lower on the back of USD strength against regional currencies despite slower inflation. Foreign banks were net sellers of bonds on Monday, started on London open after. Defensive bids were still supporting the market until close. Today MoF will be holding IDR bond auction with IDR15 trillion target. Series to be auctioned will be 3m & 12m SPN bills, 5yr, 15yr and 20yr benchmark bonds. CPI eased to 3.72% in September.
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