CIMB Daily Fixed Income Commentary - 20 April 2015

Market Roundup

• US Treasury yield curve ended flatter, amid mixed signals from higher domestic consumer prices and demand for safe-haven assets due to the decline in stock markets and increasing Greek debt concern. The 10-year Greek government bond yield surged to the high of 12.90%, from 11.24% recorded a week ago, amid growing concern that the Greece will default the debt repayment if the government fails to strike a deal with its creditors. On the macro side, headline inflation climbed by 0.2% MoM in March, despite contracted by 0.1% on a YoY basis, mainly attributed to the drop in energy prices.
• USD was dragged further by the soft economic data releases over the week, despite the consumer prices showed gradual growth by 0.2% MoM. USD/JPY continued its down trend, headed lower to 118.90 on USD weakness. Aside, EUR/USD climbed and surpassed the resistance level at 1.0800 on Friday.
• Ringgit government bonds posted little gains ahead of Friday, guided by strengthening in MYR since mid-week. Meantime, daily volume moderated from RM2.6 billion to RM1.9 billion. Bank Negara announced reopening auction for the 7-year Sukuk Perumahaan Kerajaan maturing Jul’22. Amount up for auction is RM2.0 billion while another RM1.5 billion will be issued via private placement. WI was last heard at 4.05/3.95%.
• Thai government bond yields dipped on Friday, while market remained muted with total transaction improved marginally from Bt13.9 billion to Bt14.1 billion.
• Indonesia government bonds were little changed on Friday with softer tendency on open. Buyers started to emerge during the day, providing supporting bids especially on 10-year benchmark series when its yield reached 7.50%. The market was quiet as global Bloomberg system outage impacted trading activity. Trading volume sharply dropped to IDR 5.68 trillion only.
• Asian credits were seen quoted marginally wider on Friday in secondary trading, while focus remained on the heavy pipelines.  For primary deals, China Cinda issued 5- and 10-year bonds at T+190bps and T+240bps respectively amid heavy demand, tighter than T+215bps and T+265bps. On top of that, IBK’s 5-year paper was priced at T+75bps, 15bps tighter than initial guidance level. Elsewhere, Hongkong Land and Reliance Communications were among the latest names reported on the pipelines.