CIMB Daily Fixed Income Commentary - 19 August 2014

Market Roundup

• US Treasury yield curve steepened on the back of selling activities, due to the easing of tension at Ukraine border since weekend. Aside, we think that the selling pressure also attributed profit taking activities heading towards the release of FOMC minutes on Wednesday.
• Malaysian government bond market was quiet, as players were sidelined ahead of midweek CPI announcement, while benchmark yields were left mainly unchanged. Market focus was on the curve bellies, namely GII May’24, MGS Jul’24 and Sep’21. MGS Jul’24 printed RM550 million, while yield closed 2bps higher to 3.94%.
• Thai government bond market continued to see with subdued activities amounted to Bt4.6 billion, in contrast to Bt3.2 billion garnered on Friday. Thai sovereign yield curve stayed pretty unchanged at prior levels, despite the 2Q2014 GDP number came stronger than expected. Meantime, both local and foreign players contributed total net buying amount of close to Bt4 billion throughout the day.
• IDR denominated government bond yields relatively unchanged on Monday ahead of auction, along with the lack of sentiments. Similar with previous days, transactions in the market were thin as well with total traded volume of IDR3.62 trillion, changed marginally from prior trading day. Players were seen preparing funds for auction. They also have been waiting for the Fed meeting minutes that will release in the mid-week.
• Asian credits moved in narrow range in secondary market, as players were trading cautiously ahead of the release of FOMC meeting minutes on Aug 20. Sinopec Apr’16 was traded 1bp higher to 78bps, while B3 rated Jingrui Aug’19 was dealt 0.06pt higher at 98.58pts, still below the reoffer price of 98.68pts.