CIMB Daily Fixed Income Commentary - 07 October 2014

Market Roundup

• US Treasuries closed firmer, supported by short covering and buying-on-dips interest after seeing the yields rose on Friday’s stronger-than-expected nonfarm payroll number.
• Malaysian government bond market recorded thin trading volume totalling RM1.3 billion ahead of weekend, compared to RM3.2 billion garnered on Thursday. On top of that, we saw better sellers in the market, pressuring the yields a tad higher. Despite the decline in volume, GII May’24 was in the market limelight, and transacted a sum of RM310 million throughout the day, while yield left unchanged at 4.13%.
• Thai government bonds posted gains, led by the strong net buying interest by the local players amounting to Bt4.6 billion, despite the foreign players remained net sellers. However, the market recorded light transaction of Bt8.9 billion on Monday, as compared to Bt11.5 billion garnered on last Friday.
• It’s quiet day with market players mostly sidelined today due to process election of People’s Consultative Assembly today. Coalition opposition tends to gain control after sweeping the House Representative’s Leadership last week.  It’s seen the plan to control House Representative and also People’s Consultative Assembly may block Jokowi’s program and it make more ease to do impeachment. We are seeing small selling in the 10Y bucket however the selling interest meet with supportive bidding from few players.  YC went up by 2-3 bps in the 7-10 y buckets.
• Muted market for Asian credit on Friday due to the long holiday in China and Hong Kong, amid cautious sentiment ahead of Friday’s US nonfarm payroll report. Meantime, new issue RHB Oct’19 tightened by 2bps to 132bps.