Market Roundup
- US Treasury yields inched lower across the curve ahead of weekend, reacting to the decline in stock markets as well as weaker-than-expected new home sales in June. The 10T yield moved within a narrower range between 2.25-2.28%, after falling substantially since earlier the week.
- Medium to longer tenor Malaysian government bonds weakened with yields a tad higher but bonds with 3-years maturity or shorter were supported. The weak Ringgit with USD/MYR above 3.8100 continued to pressure bonds. We think Malaysian government bonds and the Ringgit will remain under pressure in the week ahead amid the downward movement in commodity prices and despite the weaker US Dollar levels. Spot Brent was about US$55.25 per barrel Friday against above US$57.00 a week prior. Also, WTI September futures slipped below the US$49 per barrel level.
- Thailand’s government bonds remained under pressure seeing the continued weak Thai baht levels. USD/THB was spotted near 34.936 late Friday after it had surged to an intraday high above the 35.000 level at 35.035. However, as selected 3- to 7-year papers rose 3-10bps intraday, longer tenor Thai government bonds were steadier with the 10-year govvies down 2bps on the day.
- Indonesia government bond market was jittery on Friday, volume was low with USD/IDR reached 13450 level, however cover buying was still seen especially on 5yr bucket. We still think bond to continue to trade up on lack of supply prior to conventional bond auction on Aug 4th. Trading volume was lower than Thursday amounting IDR 7.2 trillion.
- US dollar denominated bonds were firm after gains along the US Treasuries market overnight. However, weak manufacturing data out of China soon dampened sentiment as stock markets dipped (Chinese index down 1%), leading to the mixed overall Asian trading close.
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