CIMB Daily Fixed Income Commentary - 06 November 2014

Market Roundup

• US Treasury yields climbed marginally along the curve, on the back of stronger-than-expected ADP employment data. Meanwhile players remained sidelined heading towards ECB meeting and nonfarm payroll report.
• Malaysian government bond market saw thinner transactions amounting RM1.8 billion, as players stayed at the sidelines well ahead of MPC meeting scheduled on Thursday. However, market is generally expecting the policy makers to keep the rate unchanged at 3.25%, as the recent sovereign yield movement did not reflect any speculative bets on interest rate hike possibility. MGS Sep’21 printed decent volume of RM449 million, while closed 3bps lower at 3.73%.
• Thai government bonds strengthened on the back of market anticipation of interest rate cut during MPC meeting scheduled on Wednesday. Daily volume rose to Bt20.9 billion, from Bt16.9 billion recorded on Tuesday, supported by strong net buying interest by the local players.
• IDR government bond traded in the range with better selling mode.  Yield move up and down by 5 bps with thin trading volume. We think market will be quiet and focus on government fuel policy.
• Asian dollar credits dealt mixed, amid thinner flows seen in secondary market. Market focus was on the long list of fresh deals rolled out on Wednesday, while we saw some investors took profit along recent issues, in order to absorb new issues. TATA Apr’20 edged down by 0.01pt to 102.00pts, while China Hongqiao traded 0.03pts lower at 110.84pts.