CIMB Daily Fixed Income Commentary - 15 Jul 2015

Market Roundup

• US Treasuries pared losses following the releases of softer-than-expected economic reports on Tuesday, which eased some speculation of an earlier rate hike this year. The retail sales contracted by 0.3% on a month-on-month basis in June, against 0.3% expansion forecasted earlier. On the other hand, import price declined by 0.1% during the same period, versus consensus estimate of 0.1% gain.
• Focus was on the 30-year MGS reopening auction for Ringgit govvies on Tuesday. Market continued to move in sideways while focus shifted to the domestic inflation data, as well as the Fed stance in raising rates.  
• Thai sovereign yield curve ended marginally steeper on Tuesday. Aside, daily transaction inched lower to Bt22.8 billion, from Bt23.4 billion registered a day before, while flows were led by LB196A, which contributed Bt10.2 billion worth of volume throughout the day.
• IDR government bond opened weaker on Tuesday following Rupiah weakness.  We are seeing better selling flows in the midst of sideways position due to long holidays ahead.  BI as expected keeping the rate unchanged at 7.5%.  We see market remains resilient with limited downside risk. Transaction volume continued to drop to IDR 6.4 trillion.
• Asian credit market was held firmer following the bailout agreement reached earlier the week, sending the yields lower in both IG and HY segments amid better risk-on sentiment.