CIMB Daily Fixed Income Commentary - 21 May 2014

Market Roundup

• US Treasury yields dipped by the range of 1-4bps along the curve, as the buying interest was boosted by the low interest rate outlook statement given by William Dudley, the New York Federal Reserve president.
• Malaysian government bonds remained thinly traded despite the trading volume surged a tad higher to RM1.7 billion on Tuesday. Players exerted selling pressure ahead of the release of inflation data and FOMC meeting minutes. Market is anticipating CPI to be held unchanged at +3.5% in the month of April.
• Long end of the Thai sovereign curve shifted upward amid selling pressure due to the Martial Law implementation on Tuesday. Meanwhile, shorter dated bonds were well supported, as players saw room for Bank of Thailand to go for further easing, after seeing the sluggish economic activities in the first quarter.
• IDR denominated government bond market ended with higher yields along the curve. The market still continued to book losses after Golkar party declared to support for Prabowo-Hatta candidacy at presidential election. However, amidst weakening we saw some players showed buying interest. In addition, the market was still heavily traded with an amount of IDR10.54 trillion, pretty unchanged from previous day. We view political news drove the market quite significantly, whilst there is no economic data that will be released this week. On the global front, players await for the Fed meeting minutes.
• Market was exerting mild selling pressure along the Thai names, following the Martial Law declared by the army in order to ease the political unrest. BBB rated Ratchaburi May’19 widened by 3bps to 167bps, while BBB+ rated Kasikornbank Oct’19 closed 4bps to 192bps on Tuesday.

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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