CIMB Daily Fixed Income Commentary - 09 June 2014

Market Roundup

• The May non-farm payrolls exceeded expectations slightly, showing an increase of 217k against 215k consensus. This lifted US Treasury yields only marginally by 1-2bps on Friday but resulted in the largest weekly losses along since over six months ago amid improved outlook for the US economy.
• The USD trended cautiously against the JPY ahead of the NFP release but improved after the jobs release. The USD/JPY moved around 102.37 late Friday from 102.64 the day prior but was spotted around 102.52 post NFP release.
• Malaysian Government Bonds closed stronger along shorter dated papers as foreign interest was suspected on the heels of overnight ECB policy moves. However, gains were limited amidst the thin trading flows. On top of the ECB meeting, players were focused also on the US non-farm payrolls data due after-hours Friday.
• Government bonds and the Thai currency strengthened for the week coming alongside overnight ECB news and improved (though limited) outlook on the domestic political front on expected fiscal boost later this year.
• IDR denominated government bonds ended with slight gains on Friday. Trading volume was moderate, approximately IDR7.59 trillion, but declined drastically from previous day of IDR12.59 trillion. We found that only two series were prominent on the day which are 15-year FR71 (IDR2.06 trillion) and 5-year FR69 (IDR10.02 trillion). The market may still sideways ahead of bond auction tomorrow and transactions may be moderate.
• Spreads along Asian dollar credits tightened on Friday ensuing from the overnight ECB moves to dramatically ease monetary policy. However, follow through gains were most probably limited ahead of the non-farm payrolls data release later on Friday. The Asia ex-Japan high grade index tightened by about 4bps on the day.

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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