CIMB Daily Fixed Income Commentary - 26 March 2015

Good Morning,

Market Roundup

• Weak durable goods orders recorded in February pressure the UST yields a tad lower in earlier session. The durable goods orders in February contracted by 1.4% MoM, below market expectation of 0.2% growth. However, US Treasuries pared gains, amid profit taking activities, after seeing softer demand in the latest 5T auction.
• In general, still see better buyers in Ringgit govvies, partially driven by the consistent decline in UST yields, pairing with MYR recent recovery. On the other hand, players continued to absorb GII papers, particularly along the mid-long range.
• Thai sovereign yield curve shifted a tad lower, guided by strong foreign buying interest, as foreign players registered net buying amount of Bt4.9 billion, despite USD/THB moved a tad higher to 32.57 during mid-week. However, the 2-year benchmark yield inched up to 1.87%, which may imply that the downside movement of the front end yield is limited in the near term.
• Uneventful day for Indonesia government bond market on Wednesday with price moved within tight range. Some buying interest was seen in short dated bills near closing hour, although overall FR70 (10-year) and FR68 (20-year) remained the most actively traded papers for the day, dominated 27% of today's total transaction volume (total IDR9.4 trillion).
• Asian credits marginally tightened, driven by overnight gains in UST. Regional HY sovereign-related names inched up further by up to 0.50pts amid positive sentiment.