Malaysia. Trading interest was muted in MYR govvies, as daily volume shrank to RM777 million. Expect flows continue to be driven by UST movement in the near term, amid a lack of fresh local catalysts. Elsewhere, latest data show foreigners adding MYR govvies into their portfolio over the month of Sep, with total net buying amount of RM7.9 billion, sending the foreign holdings in MGS+GII 1.4% higher to 27.8%.
Thailand. Yields fluctuated in tight range in quiet trade as US, Japan, and South Korean markets were closed on Monday. Foreign investors continued selling front-end govvies causing net sell position of Bt495 million. We expected firm demand for 10-year govvies auction on Wednesday.
Indonesia. IndoGB market was very quiet on Monday, impacted from US holiday. Volume was thin and market traded in tight range for the whole day although the tone seems a bit offerish. Near closing hours, small net selling activities were seen in 5- and 20-year buckets, sending yield curve up by 1-2bps. Market volume increased to IDR12.7 trillion and dominated by bonds maturing in between 1 and 5 years (34%) and bonds maturing in over 10 years (42%).
Asian USD credits. Asian dollar credits spreads widened a tad, tracking the higher UST yields driven by healthy US unemployment rate as well as improved labor earnings. iTraxx Asia ex-Japan IG index was little changed on Monday. Sentiment was weighed by weaker Caixin China Services PMI, which dipped to 50.6 in Sep, the lowest level since Dec 2015.
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