CIMB Daily Fixed Income Commentary - 28 May 2015

Market Roundup

• US Treasury yield curve ended flatter, amid some reversal in gains accumulated earlier during sell-off in stock markets. While there was a lack of fresh guidance from macro data, focus was on the potential Greek default, after the Euro authorities denied the positive progress for the negotiation with Greece.
• Malaysian government bonds closed slightly weaker, while market remained muted with a low trading volume totalling RM1.3 billion on Wednesday.  Aside, WI for the reopening of 7-year GII was last traded at 3.91%.
• Thai sovereign bonds closed almost unchanged, as players stayed at the sidelines ahead of the releases of current account and trade balance reports this Friday. Elsewhere, another factor to watch out will be USD/THB, which trended higher to 33.85 during mid-week. In our opinion, further weakening trend in THB may trigger renewed foreign selling pressure.
• Indonesia government bond prices opened 25 cents higher on Wednesday’s opening, with bids seen mostly in 10-year and 15-year benchmark series. Market traded in range for the rest of the day with some sellers emerged in afternoon session; sending yield curve near previous day's closing level, as longer end of the curve went down 3 bps. Transaction volume was IDR 14.1 trillion, about the same as the previous day.
• Asian credits moved in sideways, while market was absorbing the active primary issuances in recent weeks. Among the new issues, China Aoyuan May’28 further widened to 11.17%, from 11.02% recorded a day before. On the flip side, Perusahaan May’25 traded tighter to 4.30%, compared to 4.33% priced last week.