CIMB Daily Fixed Income Commentary - 12 May 2014

Good Morning,

Market Roundup

• US Treasury yield curve continued to steepen, amidst profit taking activities post weak 30T auction, alongside yields arising in German bunds.
• Malaysian government bond yields rose significantly along the shorter ends, as players were trimming positions after noticed the hawkish tone in Thursday’s MPC statement. We noted foreign banks cutting position on the benchmarks, whilst seeing offshore funds came in after the MGS yields surged by 10bps. Meanwhile, we saw softer selling momentum in the GII market, due to the support from the local players.
• We saw better flows in Thai government bond market, as total trading value increased by 10% to THB1.09 trillion on Friday. Government bond yields continued trending lower, however on softer momentum, amid good support from the local players. Aside, market focus was on the short dated paper of CB14527A, which contributed a total volume of THB31.6 billion throughout the day.
• IDR denominated government bond yields moved slightly in the positive area on Friday, following strengthening in the previous day after BI rate kept at the same level. Unfortunately, trading volume was very thin, about IDR1.42 trillion only. The most transacted paper was 10-year FR70 with total transacted value of IDR607 billion, whilst other papers were dealt with volume of below around IDR150 billion each. We noted that only few series were actively traded on the day. There were no fresh robust sentiments from domestic and global side.
• Asian dollar credit market closed in a weaker tone ahead of weekend, as Chinese credits in property sector under selling pressure, due to the weak market sentiment. New issue Cinda May’19 further widened to 267bps, from Thursday’s 255bps, whilst CNPC May’19 was quoted at 125bps, 2bps wider from a day ago.

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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