CIMB Daily Fixed Income Commentary - 14 May 2014

Good Morning,

Market Roundup

• US Treasuries strengthened on the back of soft economic releases, as the yields declined by 2-5bps along the curve on Tuesday. At this juncture, market participants showed better buying interest along the shorter ends, particularly post Yellen’s dovish statement earlier.
• Malaysian sovereign yield curve steepened amidst thinner transactions, as players were away from desks ahead of public holiday of Wesak Day on Tuesday. Trading volume declined sharply from last Friday’s RM3.6 billion to RM737 million recorded on Monday. Meanwhile, the 20-year MGS reopening was left untraded, with WI last heard at 4.75%.
• Total trading value fell by 14% to THB938 billion on Monday, amid profit taking activities, whilst foreign players remained as net sellers since the former caretaker Prime Minister was removed. Short term papers were pretty actively traded, namely CB14814B, CB14N13A, CB15409A and TB14521A.

·  IDR denominated government bond yields moved mixed on Tuesday. However, the weakening was limited as lacking of drivers on the day. Daily volume was relatively significant totaling IDR11.53 trillion, dominated by 10-year FR70 and 15-year FR71 which booked value traded around half of daily volume. We found that some players chose off-the-run series.

• While the secondary market was seen with thinner flow, market focus was on the new 10-year bond of Bharti Airtel, which was estimated to be issued around 300bps above treasury. On the flip side, China Overseas May’24 was traded unchanged at 373bps, whilst Korea Land Aug’17 tightened to 93bps, 17bps away from offering price of 110bps.

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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