CIMB Daily Fixed Income Commentary - 23 June 2014

Market Roundup

• We saw correction on Friday as US Treasury yield curve flattened, due to players’ buying-on-dips activities after seeing the long end yields surged a tad higher on Friday.
• Malaysian Government Securities continued to weaken. Sentiment remained cautious ahead of the MPC meeting in July and the weak 3-year MGS reopening auction during the week, as well as ahead of the May CPI data release.
• Thai sovereign bonds were dealt steady but came under some sell-off ahead of the close - despite suspected foreign interest. On the day, foreign investors were net buyers of Bt3.6 billion of bonds, added from Bt8.4 billion net buys the day before. LB176A ended 1bp higher to close at 2.46%. ·        IDR denominated government bonds still hovered near previous levels amid a lack of fresh drivers from the domestic and global side. Yields tended to move up especially along longer dated bonds. We noted that trading moderated to IDR8.06 trillion, thinner compared with IDR9.62 trillion previous day. Approximately half of the volume was donated by two series only which are 15-year FR71 and 20-year FR68 about IDR3 trillion and IDR1.12 trillion respectively.
• IDR denominated government bonds still hovered near previous levels amid a lack of fresh drivers from the domestic and global side. Yields tended to move up especially along longer dated bonds. We noted that trading moderated to IDR8.06 trillion, thinner compared with IDR9.62 trillion previous day. Approximately half of the volume was donated by two series only which are 15-year FR71 and 20-year FR68 about IDR3 trillion and IDR1.12 trillion respectively.
• On Friday, Asian dollar bonds consolidated but overall sentiment remained buoyed by the Fed’s stance to keep interest rates low for a longer period. Closing weaker include HY sovereigns but newer corporate bonds remained firm. HY Indonesia and ROP bonds are more than 1 points firmer since the FOMC decision.

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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