Market Roundup
- US Treasuries further weakened amid optimism ahead of meeting between EU and Greece leaders. The 10T yield surged to 2.40% on Friday, after reaching the low near 2.18% during the week. On the other hand, the Fed chief Janet Yellen mentioned that the US economy was improving, and expects that it will be appropriate to go for a rate hike later this year.
- Malaysian government bonds trudged firmer on Friday, supported by the USD/MYR pair remaining below the 3.8000 mark. Meantime, swap rates were mixed, right after Bank Negara held rates the day before.
- Thai baht government bonds closed steady within a tight range. Most benchmark papers were about 1bp lower on the day. At the same time, the Baht was little changed with USD/THB around 33.94 late Friday, whilst the foreign reserves number was released showing a decline to $159.1 billion as at 3 Jul from $160.3 billion at 26 Jun. We think players were cautious not to place too much bets ahead of more data releases later in the month, comprising trade, BoP as well as manufacturing and car sales numbers.
- Indonesia government bond market traded up on Friday on better Greece sentiment. FR70 (03/24) and FR68 (03/34) were the most traded bonds, persistent bids however especially seen on next year's 15yr benchmark bond (FR56) due to lack of supply. With no more conventional auction this July due to Ramadhan holiday, we think market has a good chance to trade up on short supply. Volume decreased sharply to IDR 13 trillion.
- Asian dollar denominated credits received a boost for a second day running from a consecutive day of Chinese stock market gains. China’s Shanghai stock index was heard surging about 4.6% Friday. With that, we heard Chinese high grade names as much as 15bps narrower on the day.
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