CIMB Daily Fixed Income Commentary - 17 April 2014

Market Roundup

• US Treasury curve continued flattening, as buying interest along the short and medium term papers declined, whilst 30T strengthened with softer momentum, which may see some profit taking activities, given that the spread between 10T and 30T tightened to the 81bps, the lowest since May 2010.
• Ringgit sovereign curve remained firm at prior levels, amid soft trading flows. We noted strong buying interest on short dated GII Jul’14, which pressured the yield down by 13bps to close at 2.97%.
• THB denominated government bonds garnered gains long the medium and long ends after the market reopened post Songkran Festival public holiday. Players continued to show strong trading interest along the short dated papers along the SA segment, as CB14717B was most actively traded on Wednesday.
• IDR denominated government bonds moved mixed in narrow range on Wednesday. Overall, trading volume was thinner approximately IDR7.44 trillion from IDR9.07 trillion a day before. The benchmark series were dealt with moderate volume. Meantime, some players showed their preference to shorter dated papers (such as 3-year SR006 and SPN series), other papers were transacted thinly.
• Market was relatively active compared to the last few trading sessions, amid net buying flows from sidelined cash. However, Chinese credits were slightly under pressured, due to the concern of slower GDP growth. China Resources Feb’19 edged down by 0.03pt to 101.31pts, China Merchant Dec’18 fell by 0.12pt to 102.11pts, whilst Towngas Perp inched up to 103.91 from 103.89pts.

Best Regards,
CIMB Fixed Income Research
Corporate Banking, Treasury and Markets
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