CIMB Daily Fixed Income Commentary - 16 October 2014

Market Roundup

• US Treasuries rallied on mid-week amid selloff activities in global equity markets. However, the rally was capped by quick profit taking activities. The 10-year notes tested the intraday low of 1.86%, before eventually surged and closed at 2.14%.
• Ringgit govvies dealt mixed on mid-week. Players were seen better selling along GII segment, particularly on the 10-year GII, which closed 1bp higher at 4.11%. Meantime, trading volume moderated from RM9.1 billion to RM4.0 billion.
• Thai sovereign yields fell along the front end and curve belly, as players continued to show mild buying interest. Aside, total volume rose to Bt31.3 billion, compared to Bt25.3 billion a day before, while market focus was on LB196A, which traded 2bps lower at 2.70%. In contrast, Thai IRS curve was held relatively unchanged on mid-week.
• Indonesia Government bond market traded lower following yesterday's bond auction. Market traded in range for 1st half of the day before going down in afternoon session as market players tried to sell yesterday's auctioned bonds with FR71 (15yr) being the most active bond today, sending yield up 2-4 bps across the curve.
• Asian credits edged lower on midweek, along with the congested pipeline issuances. CLP Power perp fell by 0.11pt to 100.38pts, while CHIOLI May’24 widened by 3bps to 283bps. On the other hand, Korean Reinsurance priced its 30NC5 paper at 4.60% amid overwhelming demand, as bid-to-cover ratio reached 6 times for its $200 million bond. Aside, Power Construction perp NC5 paper was issued at 4.05%, also well received by the market with a BTC ratio of 6.6 times for the $500 million issue.