CIMB Daily Fixed Income Commentary - 03 November 2014

Market Roundup

• US Treasury yields rose by 2-4bps along the curve, as investors with noted with improved risk appetite into global equities, following the unexpected BoJ’s decision in expanding the easing measure to JPY80 trillion per annum.
• Malaysian government bonds were moving within narrow range on Friday, guided by some month-end portfolio rebalancing activities, amid a lack of market guidance ahead of MPC meeting this week. Trading volume was decent mounting RM3.1 billion ahead of weekend, led by RM990 million contributed by GII May’24.
• Thai government bonds posted gains, after the Ministry of Finance lowered the GDP growth forecast to 1.4% from 2.0% a day ago. Meantime, daily volume rose from Bt14.6 billion to Bt18.5 billion, while market focus was along LB15DA (-1bp) and LB236A (-4bps), which printed a combined volume of Bt8.5 billion on Friday.
• Another day in Indonesia government bond market ended in positive tone on BoJ's additional stimulus impact. Healthy demand was still seen in 15yr and 20yr buckets ahead of next week's bond auction, continuing yesterday's trend. CPI and trade balance data will be released this coming Monday.

The unexpected upsized in BoJ’s annual base money expansion from JPY50 to JPY80 trillion spurred positive sentiment in the Asian dollar credit market. Hence, we saw credit spreads tightened in general, while recent issues - TATA Motors Apr’20 closed 0.09pt higher at 101.80pts, while Hongqiao May’18 edged lower by 0.02pt