CIMB Daily Fixed Income Commentary - 27 January 2015

Good Morning,

Market Roundup

• US Treasuries weakened with yields rebounding from recent lows, mainly driven by profit taking activities after the recent rally. Also, we think that the sentiment turned cautious heading towards FOMC meeting this week.
• Front end and bellies of the MGS curve continued to attract buying interest, despite daily volume dipped from RM5.9 to near RM5.0 billion on Monday. Trading interest were along the medium term GII Jul’22, as well as short dated MGS Feb’15.
• THB denominated government bonds extended gains, despite foreign players net sold Bt3.8 billion worth of bonds on Monday. On the flipside, trading volume shrank substantially from Bt39.7 billion to Bt24.8 billion, as trading interest may be dampened by cautious sentiment heading towards the MPC meeting this Wednesday.
• IDR government bond market was softer yesterday on profit taking action. Market in general was quiet with selling interest from local names dominating the activity. We will have Sukuk auction today with 2T target amount.  We believe there is a strong demand for this auction. Trading volume eased to IDR 11.52 trillion.
• Asian dollar credits widened, amid selling pressure triggered by the concerns on Eurozone stability post Greek election held on Sunday.