CIMB Daily Fixed Income Commentary - 20 March 2015

Good Morning,

Market Roundup

• Profit taking activities after the post-FOMC rally sent the US Treasury yields higher, erased some gains recorded during mid-week, amid a lack of fresh catalyst from the economic data releases.
• Malaysian government bond market remained active, as daily volume recorded at RM4.8 billion, driven by heavier transactions in GII papers. On top of that, buying sentiment was boosted by a firmer MYR during the earlier session, as USD/MYR gapped lower from 3.7075 to 3.6540 when market opened. However, market was seen relatively quiet after seeing the currency pair trended higher to above 3.7000 late Thursday.
• Thai sovereign bonds extended gains, as players were seen with stronger buying interest, guided by the Fed’s dovish stance. Meanwhile, daily volume surged from Bt15.0 billion to Bt26.5 billion on Thursday.
• Indonesia government bond market rallied post-FOMC, opened 1% higher in price term as market responded well on Fed decision. Rupiah appreciated, as USD/IDR dropped to 12,990, which drove better buying interest from both local and foreign players into the bond market. Profit taking action was seen after 10yr offer yield reached 7.15%, and prices settles at current level until closing. Trading volume decreased to IDR 12.69 trillion and the most active bonds were FR69 and FR70.
• Asian credits strengthened amid improved sentiment on the back of less-hawkish stance from the Fed. Shimao Feb’22 closed firmer by 0.12pt to 101.20pts, while ICBC Mar’20 tightened to 168bps. However, secondary market was relatively quiet as investors awaited for upcoming primary deals.