CIMB Daily Fixed Income Commentary - 01 July 2014

Market Roundup

• US Treasury yields inched down, due to the buying support from quarter end portfolio rebalancing. However, the buying momentum was seen softer compared to last week.
• Malaysian government bond yields moved in mixed directions, amid moderated trading volume totalling RM1.7 billion. Apart from that, we noted decent buying interest on the curve belly, which pressured the yields lower, particularly GII Mar’21, MGS Oct’19 and Sep’21.
• THB denominated government bonds were moving in sideways, while shorter term yields inched up by 1-2bps on Monday, despite the strong net buying activities from the offshore players. On the other hand, trading volume fell significantly by Bt6.7 billion to Bt8.0 billion, while most of the trading activities concentrated on the short dated LB15DA, which was traded 2bps higher to close at 2.16%.
• IDR denominated government bond market moved in positive area yesterday. Some players showed net buying interest after booking losses quite substantially during last week. The bond market strengthening was in line with rupiah exchange rate down to below 11,900 after hover around 12,000 previously. Furthermore, trading volume was thinner approximately IDR6.53 trillion against IDR8.15 trillion in the prior trading day.  
• Asian credits were held pretty unchanged due to the muted market. Meanwhile, we saw thin selling pressure in the market, pressuring the spreads marginally widened. The new Greenland Jul’24 was traded 1bp wider to 392bps, while AmBank Jul’19 was seen quoted at 137bps, unchanged from Friday’s level.