US Treasuries. UST were little changed ahead of FOMC minutes release. In economic data releases, the existing home sales registered at 5.48m for the month of Oct, above consensus 5.40m and Sep 5.39m. Other than FOMC minutes, players are also eyeing on the durable goods orders, where economists expect a slower growth rate of 0.3% in Oct, compared to 2.0% recorded in Sep.
Malaysia. Trading activities remained slanted towards short dated papers, possibly driven by continued currency play alongside firmer MYR due to the upbeat 3Q2017 GDP release and recent hawkish tone from central bank. USD/MYR was traded lower at 4.14, potentially revisit next hurdle at 4.10. WI for 15y MGS was taken at 4.60%, lower than 4.70/63% quoted a day prior. In our opinion, the 15y MGS appears to be cheap, offering a wide 10x15 spread >60bps, in contrast to a median spread of 43bps on year-to-date basis. In our opinion, it may be priced within a lower range of 4.53-4.58% amid improved sentiment.
Indonesia. Secondary market was largely unchanged with trading interest remained in benchmarked series. FR61 was the highlight on Tuesday, with better buying flows seen in the market. Demand for sharia auction remained solid as expected, as incoming bid was about IDR16t and government upsized the issue size from IDR5t initial target to IDR6t. Post auction, the total issuance in 2017 almost reaches the initial target, which may cause government to cancel next auction. We think that this is positive to bond market, as there will be minimal offering for the remainder of this year.
Asian Dollar Credits. Asian dollar credit market saw sideway movements in secondary trading, but pressure was seen amid heavy primary pipelines. Apart from Export-Import Bank of China's multi tranches denominated in USD and EUR, Union Bank of Philippines' 5y bond was guided at T+160bps, and Chiyu Banking's perp NC5 was indicated at 5.25%.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
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