CIMB Daily Fixed Income Commentary - 10 March 2014

Market Roundup

• US Treasury yields shot up on net selling activities on the back of better than expected non-farm payrolls data.
• The NFP for February rose 175k over the earlier consensus of +149k while the prior month’s number was revised up to +129k from 113k in an earlier estimate.
• Malaysian Government Bonds were dealt mixed on relatively thin volume. Earlier in the week, players kept to the side-lines awaiting Bank Negara’s Monetary Policy Committee (MPC) meeting and interest rate decision late on Thursday. However, sentiment barely changed post-MPC. Also awaited was the release of the February non-farm payrolls numbers in the US.
• Foreign support continued along the THB bond market amid the receding political risks, as protests and violence ended this week. However, we think medium term risks remain. Furthermore, continued support was also seen by players in general as the await the upcoming MPC decision.

·  IDR government bond market was rangebound on Friday. We saw some flows earlier in the day but much of the gains were erased on profit taking action seen in the afternoon session.

• The Asian dollar space was relatively muted as investors awaited the February non-farm payrolls data. However, Chinese dollar papers were in demand, boosted by the firmer yuan currency. Sentiment for Chinese names was little perturbed by news of failure by Shanghai Chaori Solar to pay up coupon payments. This was the first default on onshore Chinese bonds. Still dollar papers like CNOOC and Sinopec as well as real estate names like Wanda and CHIOLI booked gains on the day. The iTraxx Asia ex-Japan high grade index tightened by about 2bps.

Best Regards,
CIMB Fixed Income Research
Corporate Banking, Treasury and Markets
Tel: +603 2261 8888 | Fax: +603 2261 8705
www.cimb.com

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