CIMB Daily Fixed Income Commentary - 13 January 2015

Market Roundup

• Persistent risk-aversion sentiment due to falling crude oil prices and weaker stock market performance, continued to exert downward pressure to the US Treasury yields. The 10T yield broke the resistance level of 1.95% and retested the low of 1.90%.
• The central banks announced RM4.0 billion reopening of the 7-year GII (GII Jul’22). WI was last heard near 4.30/25%. However, noted gains along the ringgit, which turned towards 3.5415 early morning spurred buying of ringgit govvies on Monday. However, the volatile ringgit again turned, moving towards 3.5672 late Monday. There was some foreign interest along the bellies of the curve, which saw yields down 5-7bps but gains were pared as profit taking took hold and whilst the ringgit reversed late in the day.
• Thai government bonds closed mixed as the Baht was dealt rangebound on Monday. Total govvies trading was also decent at Bt13.7 billion. On top of wariness over the currencies market, players avoided larger bets ahead of this month’s MPC meeting.
• Along the government bond market, we were seeing foreigners continue to buy in the morning session on Monday. In the afternoon session buyers retreated and we saw more sellers in the market instead. Volume jumped twofold from a week earlier to IDR 12.7 trillion. Market focused on benchmark bonds FR68 (maturing in 2034) and FR70 (maturing in 2024).
• Asian credits saw thinner trading amid the holiday in Japan. Nevertheless, sentiment remained poor due to credit concerns, specifically as risk appetite waned after the poor US wages data (alongside Friday’s non-farm payrolls last Friday).