CIMB Daily Fixed Income Commentary - 19 September 2014

Market Roundup

• US Treasuries posted little gains on Thursday, as the arising yields attracted some buying-on-dips interest post FOMC meeting, which sounded much neutral stance going forward.
• MGS benchmarks were left unchanged at prior levels, amid another quiet trading day. Daily transactions remained low at RM1.1 billion, despite MGS Oct’19 and GII May’24 printed decent volume of RM258 and RM260 million respectively throughout the day. Meanwhile, WI for the 30-year MGS was last heard at 4.75/65%.
• Thai government bonds posted little gains along front end of the curve, while daily volume rose from Bt5.4 billion to Bt8.6 billion on Thursday. LB196A closed unchanged at 3.00%, despite actively transacted at Bt3.5 billion throughout the day.
• Bond market opened lower in terms of price as market reacted to weakening of IDR currency beyond 12,000 level, sent yield curve up 5-7 bps 10yr to longer end. Market well supported, light buying action by locals emerged in the afternoon especially on 10yr and 20yr buckets.
• We saw heavier trading flows in Asian credit market on Thursday, as the cautious sentiment eased after the Fed chief Janet Yellen stated that the low interest rate environment is likely to remain “for a considerable time”.