FW: CIMB Fixed Income Daily - 07 Feb 2018 - UST yields ticked higher along firmer stock markets

 

 

UST yields climbed, reacting to recovery in stock markets. Worries over potential government budget resolution eased, after the House approved a bill to avoid the shutdown. On the other hand, St Louis Fed president James Bullard said that the robust employment not necessarily will push the inflation higher quickly.

MYR bonds moved in sideways, seeing muted impact from fluctuation in UST. Activities were led by short dated off-the-runs papers maturing 2018-2019, possibly due to portfolio adjustment by foreign players as USD/MYR ticked higher above 3.91. The 7y GII saw firm demand with 2.283x btc, while average yield was 4.128%, within a narrow spread of 4.11-4.138%, and was priced at the higher range of WI 4.13/03% quoted in the morning. Post auction, we noted it was traded in range and was well capped at 4.14%.

Bearish sentiment weighed on Asian Dollar credits. Investors remained cautious amid bargain hunting interest following the declines in global stock markets, led by plunge in US DJIA early the week. Expect volatility to persist amid fluctuations in stock markets and UST.

Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
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