CIMB Daily Fixed Income Commentary - 20 May 2014

Market Roundup

• US Treasury yield curve steepened, as players took profit on the rally last week, amid lacking of major market drivers.
• Malaysian sovereign yields edged up along the curve, amid thinner trading activities on Monday. Total trading volume fell by RM700 million to RM1.2 billion. We view that the market is slightly cautious on the inflation data release this week, which may see thinner trading volume ahead of the economic release.
• Thai government bonds weakened as market sentiment was adversely impacted by the contraction in 1Q2014 GDP of -0.6% YoY, due to the prolonged political issues. Aside, transactions were thinner as total trading value declined by 10% to THB908 billion on Monday. Players were slightly cautious, and seen with better buying interest along the short dated segments.
• IDR denominated government bond market was volatile on Monday. The market moved positively at the opening as players reacted positively to Joko Widodo and his running mate Jusuf Kalla candidacy at presidential election this year. However, the market turned negatively after Golkar stated its support for Prabowo and Hatta candidacy. The movement in the bond market was in line with strengthening rupiah, despite ended lower, still paring gains generated in early day. Overall, transactions were pretty active with total volume of IDR10.27 trillion, but dropped compared with previous day of IDR15.44 trillion.
• Dollar credit market was pretty quiet throughout the day, amid lacking of major market movers. In IG space, spreads were seen firm at prior levels, due to inactive market. On the flip side, the iTraxx Asia ex-Japan IG Index hovered at 118bps close on last Friday. Aside, market was eyeing pipelines from South Korea, Korea Exchange Bank, LG Electronics and Kazakhstan.

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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