CIMB Daily Fixed Income Commentary - 04 March 2015

Good Morning,

Market Roundup

• US Treasuries further weakened, driven by investors’ selling activities to pave way for the upcoming primary deals from the credit market, amid a lack of fresh guidance from the macroeconomic data.
• Malaysian government bonds closed weaker on Tuesday, as sentiment dented by the 1MDB negative news. Also, daily volume turned lower at RM2.1 billion, compared to RM2.4 billion recorded a day earlier. In our opinion, players downplayed the interest rate cut possibility for the upcoming MPC meeting.
• Thai government bond yield curve ended flatter, while short dated bonds were well supported and anchored near prior levels. Aside, daily volume rose from Bt19.4 billion to Bt22.8 billion, as trading interest was boosted by the LB446A reopening auction.
• Indonesia government bond market traded on a weaker tone during auction day, amid cautious sentiment as USD/IDR trended slightly higher, tested the resistance level of 13,000. MoF targeted IDR 10 Trillion from yesterday's auction, still oversubscribed with 22.8T incoming bids, with most bids on FR70 (30.7%). Government issued IDR10 trillion of bonds, bid-to-cover ratio of FR70 1.8x. A few foreign banks were seen trimming position after auction result announcement. Transaction volume stayed small amounting IDR 11.47 trillion.
• Asian dollar credits dealt mixed on Tuesday. China property names continued to draw bidding interest post PBoC’s rate cut decision, as Yuzhou Property closed 0.08pt higher at 98.53pts, while Shimao Property Feb’22 peaked at 102.46pts, from 102.23pts a day ago.