Market Roundup
- US Treasuries further strengthened on the back of flows for the safe haven demand, due to the weak performance in global stock markets, particularly Shanghai Stock Exchange Composite Index, which fell steeply by more than 8% on Monday.
- Ringgit govvies closed mixed, with last week gains pared as USD/MYR was trading near 3.8200 late Monday. However, short term papers continued to be well supported, guided by the rollover demand on the maturing papers (MGS Aug’15 and MGS Sep’15), in conjunction with the short supply of short dated bills.
- Thai govvies recovered a tad after seeing the bonds under selling pressure last week, accompanied by the slight recovery in THB. We think that the government bond yields may shift lower by up to 5bps across the curve ahead of the MPC meeting, as the latest economic data remained subdued.
- Indonesia government Bond market traded down on Monday due to weaker IDR currency, some selling action was done by local players. Some defensive bids were seen, supporting the market. BI was seen in the market, checking prices. We think bond market will be jittery ahead of this week's FOMC. Tomorrow MoF will be holding Syariah bond auction with IDR 2.5 trillion target. We think demand might be concentrated on bonds maturing 5yr and less. Volume improved to IDR 10.5 trillion.
- The renewed risk-off sentiment amid Chinese stock market slump weighed on Asian credits early this week, while CDS spreads were seen widened up to 8bps for regional countries. Malaysia’s CDS widened by 8bps to 143bps, despite S&P maintained its sovereign rating at A- with a stable outlook.
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