Market Roundup
- US Treasuries weakened on Friday, following a solid NFP data reported on Friday. The NFP recorded 280k job creation in May, which triggered another sell-off ahead of weekend. Meanwhile, the unemployment rate inched up from 5.5% to 5.4%, due to the higher amount of job seekers.
- Malaysian sovereign yield curve ended steeper, as short dated papers garnered decent demand amid bearish sentiment. Aside, daily volume moderated from RM5.5 billion to RM4.6 billion on Friday. The 10-year MGS reopening auction ended with weak demand, as bid-to-cover came low at 1.67 times, while average yield was 4.037%, about 9bps higher than the initial WI of 3.95/93%.
- Thai government bonds recovered a tad from sell-off event earlier, with the yields inched lower by up to 2bps across the curve. Elsewhere, daily volume declined further from Bt25.8 billion to Bt16.0 billion.
- Indonesia government bond market weakened further on Friday, continuing previous day's sell-off. However selling pressure eased compared to prior day. Meantime, BI held buyback auction after the break with IDR1 trillion target buying for all benchmark series, but the central bank cancelled the auction later with undisclosed reason, despite incoming offers reached IDR3.655 trillion. Our guess is BI's target buying level was much lower than what market players offered in the auction. Defensive bids were seen at current level, supported the bond market, while trading volume was IDR10.4 trillion.
- Asian dollar credits ended wider on Friday, led by cautious sentiment well ahead of the release of US NFP report. Meanwhile, iTraxx Asia ex-Japan IG Index was seen about 1bp wider at 110bps.
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