Tuesday, October 17, 2017

FW: CIMB Fixed Income Daily - 17 Oct 2017 - Regional bonds quiet / UST weak overnight amid Fed risk

 

 

US Treasuries. UST curve rose on the back recent rate hike statements from Fed members. Boston Fed president Rosengren is expecting Fed to raise rate in Dec, while eyeing for three to four hikes in 2018. He added the economy may overheat if inflation reaches the 2% objective while unemployment dips below 4%. On a separate note, Trump will be meeting Yellen on Thursday for discussion on Fed chief position.

Malaysia.  Secondary trading was quiet with focus on Monday with the market focused on the primary segment. Players were also cautious amid holiday-shortened week while awaiting Sep CPI slated for this Friday, where consensus sees it to tick higher to +4.2% yoy from +3.7% yoy a month prior.

Indonesia. IndoGB market was generally quiet on Monday. Players were seen favoring the primary market, where the government is targeting to issue IDR15 trillion in a bond auction. However IDR currency strengthened after Friday's US CPI data, added by good trade surplus data from local side ($1.76 billion in September, slightly higher than expected $1.26 billion) and subsequently the tone was slightly biddish in the bond market. Volume improved to IDR6.9 trillion.

Thailand. Thai GB yields fluctuated in a tight range as players returned from the long holiday amid cautious trading before LB466A auction scheduled on Wednesday. Foreign investors moderately reduced position in Thai bonds at Bt487 million. Front-end (<1yr) IRS rate and govvies yield stayed supportive and 1yr IRS traded at 1.3%, 6bps higher than last week. We, maintain year-end target of 1y THBIRS at 1.50%.

Best Regards,

CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
www.cimb.com
Find us on Bloomberg at CIMR <Go>

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