CIMB Daily Fixed Income Commentary - 27 August 2014

Market Roundup

• US Treasury yield curve ended flatter, as the long end bonds pared gains, following positive economic data releases on Tuesday.
• MGS benchmarks continued to show weaknesses, while trading activities remained subdued at RM977 million on Tuesday. On the other hand, Bank Negara Malaysia announced the reopening of 10-year GII, which came in a size of RM3 million. WI was seen traded at 4.15-4.16%, while last quoted at 4.165/15%.  
• Thai govvies closed firmer on the back of stronger net buying activities from both local and foreign investors on Tuesday. While daily volume remained thin at Bt7.2 billion, short dated papers LB176A and LB196A attracted heavier volume around Bt2 billion respectively.
• IDR denominated government bond yields were relatively unchanged on Tuesday. Despite the govvies traded in narrow range, we saw heavier trading volume, about IDR9.52 trillion changing hands on the day, rising from a day before of IDR6.70 trillion. We still see that the sovereign yield curve may flatten amid lacking of catalysts currently.
• Asian dollar credits were well supported post UK Summer Bank Holiday, despite seeing some flows from the primary market. On Tuesday, China Orient issued 5- and 10-year papers at 255bps and 300bps respectively, while LINK REIT priced its 10-year paper at 145bps. Meanwhile, latest pipelines on news included Cathay Pacific, Indonesia global Sukuk and Jinbei Auto.