CIMB Daily Fixed Income Commentary - 26 August 2014

Market Roundup

• Long end US Treasuries extended gains, supported by buying interest after the release of the weaker-than-expected new home sales figure early the week. Meanwhile, trading activities shrank on the back of Summer Bank Holiday in UK.
• Malaysian government bond market was muted, amid lacking of fresh drivers, coupled with the anticipation of the 10-year GII reopening this week. While the Ringgit govvies were traded in mixed directions, we noted that market slanted towards better sellers, particularly on the MGS Jul’24 (10-year MGS) as well as GII May’24, which closed 1-2bps higher to 3.96% and 4.15%.
• THB denominated bond yields inched up along the curve belly, amid muted transactions, as players were sidelined ahead of the economic indicator releases this week, which included customs trade balance and BoP figure. Market focus was on LB196A, which printed Bt2.5 billion throughout the day. Also, LB236A was decently traded amounted to Bt990 million ahead of the reopening auction on Aug 27. BoT is expected to conduct an auction for LB236A, with a target size of Bt15 billion.
• IDR denominated government bond moved in narrow range as no fresh catalyst to lead the market on Monday. Yields moved up and the market booked decent trading volume totaling IDR6.70 trillion, despite thinner compared with a day before of IDR8.25 trillion.
• Asian dollar credit market was seen with thin trading flows on Monday. However, new issues firmed, as Yingde Gases edged higher by 0.46pt to 101.44pts, while MCC Aug’17 traded tighter to 164bps, from 175bps priced last week.