US Treasuries. Treasuries bull flattened, reacting to the weaker-than-expected Sep CPI at +2.2% yoy, despite higher than Aug +1.9% yoy (consensus +2.3%). Over the weekend, Yellen said she sees impact from hurricanes on economy to be short term, but "the longer-term effects will be modest and aggregate economic activity will recover quickly".
Malaysia. Malaysian govvies market was generally quiet with some net buying interest heard near the 15y tenures. There was little in terms of market drivers, with caution ahead of coming week's release of Sep CPI (seeing consensus is a higher +4.2% against 3.7% yoy in Aug). We think some shortening of duration play may emerge ahead of CPI and if inflation does trek higher. MYR still relatively firm near 4.2145 and UST gains Friday should also support shorter-dated papers.
Indonesia. Market was sideways with better buying tone in 15y tenors though we think interest was driven by short covering. In the short term period, we think market will trade in range and we will keep watch closely on Catalonia news and macro data.
Thailand. Flows was thin on Thursday as investor waited to see US inflation data and local players were in holiday mood before Thailand's market closing on Friday. Demand was witnessed along the curve and the auction of 14d govvies drew firm demand. Post-weaker than expected US inflation on Friday, we expect bond market will outperform in this week and the issuance of LB466A on Wednesday would receive firm demand after solid buy of LB26DA auction last week.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
www.cimb.com
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