CIMB Daily Fixed Income Commentary - 25 April 2014

Market Roundup

• The longer ends of US Treasuries continued to see buying interest, pressuring the yields to dip further by 2-3bps amid concerns of escalated political tension in Ukraine. 10T edged down by 2bps to 2.68%, 5bps higher from a week ago. Meanwhile, 30T reached 3.45%, only 1bp higher than the level before last week sell down.
• Market focus was on the short term government bonds, particularly MGS Apr’14, Dec’14, Sep’15 and Jul’16, which attracted decent trading volume of approximately RM200 million each. Aside, Malaysian government bonds were largely traded in narrow range, whilst seeing the trading volume edged up to RM1.95 billion on Thursday.
• Thai government bonds were pretty actively traded, as trading volume rose decently by 16% to THB1.2 trillion. Aside, sovereign yield curve dipped further amid solid buying interest. Meanwhile, players were seen slightly extending their portfolio duration to the longer dated bonds of LB176A and LB196A post MPC meeting. Both foreign players and asset managers continued to be the main net buyers in the bond market.
• IDR denominated government bond moved positively on Thursday. However, players were still in cautious tone as there were no catalysts, despite the yields dropped marginally. We found that volume was still relatively moderate with total amount of IDR8.60 trillion, led by the 10-year FR70 and 20-year FR68. In addition, we saw new series 3-year SR006 was still actively traded.
• Dollar credits were seen traded in mixed direction amid flows of new issues. The newly issued CNOOC tranches were seen with mixed market reaction, as the 3- and 30-year papers were 3bps and 1bp tighter than the offering yield, whilst 10-year tranche widened by 3bps to 163bps. Sinopec tranches were under pressured and quoted lower, due to the new issuance of CNOOC.

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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