Market
Roundup
- US Treasuries posted gains amid a batch of mixed economic data and as players reined in bets ahead of Friday’s release of the non-farm payrolls. However, the NFP is expected to show a stronger increase of 218k for the month of April, exceeding +192k the prior month.
- On Wednesday, the US 1Q GDP growth was printed at a smaller +0.1% against consensus of 1.0%. However, the same day, the Fed further cut the QE purchases by another $10 billion to $45 billion per month. On the other hand, the Fed kept its forward guidance to keep interest rates low for a ‘considerable time’ after the QE ends.
- Ringgit sovereign curve flattened on Wednesday, amid mild trading interest ahead of the FOMC meeting. The new 5-year MGS ended 1bp lower to 3.64% (from the auction result). Sentiment was pretty cautious ahead of FOMC meeting and Labour Day holiday.
- THB denominated government bond yields inched up along the curve, with exception that the 2-year government bond yield dipped by 1bp to 2.07%. We continued to see heavy transactions along the shorter dated papers, namely CB14520A, CB14605B and CB14731B. On Wednesday, foreign players were seen trimming positions with net selling amounted to THB5.2 billion.
- IDR denominated government bond market recorded higher yields on Wednesday. The latest auction was not decent in the previous day, as demand was soft and players asked for relatively high yields. Moreover, the market also awaited the Fed meeting result on the day. Overall, transactions moderated with trading volume of IDR9.18 trillion, declining from a day before of IDR13.17 trillion. Around two third of total volume was concentrated on the benchmark series.
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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