US Treasuries. UST closed mixed on sideways movement all day. The curve continued to flatten, boosted by outlook for low inflation at a time when the short end is somewhat pressured before the Dec 2017 anticipated rate hike. Meanwhile, mild risk has emerged with the New York Fed announcing its president William Dudley will retire some six months earlier than scheduled. Dudley is usually regarded as a dove.
Malaysia. MYR government bonds saw light interest with UST yet to open in the US post last week's NFP release and ahead of Bank Negara Malaysia's MPC meeting this week. No change expected from the central bank and thus little sway on the market right now.
Thailand. Yields fluctuated with a downward slant with net buying interest concentrating around the back of the curve. Activities were extremely quiet and outright trading recorded at Bt39.06b, the lowest trading value in 2017 as the market lacked trading cues. Moreover, the MPC meeting is underway and the market avoided taking big positions.
Indonesia. IndoGBs were traded down on Monday as USD/IDR gapped higher on open following Friday's US jobs data. Despite the downward movement in price, bonds looked well-supported especially at current levels. MoF will hold an IDR sharia bond auction today with IDR5t target, and we expect demand to be moderate-to-solid.
Asian USD credits. USD credits were confined to a narrow range, supported by last Friday's UST gains on the back of higher but lower than consensus Oct NFP data. Gains were reportedly slanted along Korean names seeing its gains along the CDS segment on Monday. There was little interest otherwise amid a lack of USD primary offerings to begin the week.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
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