CIMB Daily Fixed Income Commentary - 16 May 2014

Good Morning,

Market Roundup

• US Treasuries strengthened on the back of robust buying interest shown by market participants, particularly after earlier short covering positions, despite the strong data seen in Empire Manufacturing. 2T yield dipped by 2bps to reach 0.35%, the lowest since mid of March this year. We think that the sharp decline in yields may attract some profit taking activities in the short term.
• Malaysian sovereign yield curve shifted lower, amidst some buying-on-dips activities after the sell down on Friday. Market focus was on the curve belly, such as MGS Oct’19 and Jul’24. On the other hand, GII Mar’21 and May’24 attracted robust buying interest too, thus drove the yields 1-2bps lower to 4.04% and 4.20%.
• Thai government bond market was relatively quiet on Thursday, as market sentiment slightly impacted by the political tension, despite we saw improved net buying interest from the foreign players. Buying interest concentrated on the curve belly, which pressured the yields a tad lower, ranging from 1-3bps. Aside, market focus was on the government bonds, namely LB196A, LB176A and LB236A.
• Indonesian bond market was closed on Thursday’s Waisak Day.
• Asian dollar credits were traded in narrower range in general, amidst no major market drivers on Thursday. Chinese property credits were seen moving in mixed directions after seeing the rally momentum softened, State Grid May’24 widened by 3bps to 139bps, whilst Agile Apr’17 inched up from 102.96 to 103.11pts.

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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