Market Roundup
- In this holiday-shortened week, we expect more volatility for bonds with the Ringgit still weak and US Treasuries under pressure. We expect support for MGS only if MYR movement is contained. Foreign interest should only be piqued if MYR is above 3.8000 and the 10-year MGS above 4.05%.
- US Treasuries strengthened on the back of early week Greek tension, as well as dovish FOMC statement. However, US Treasury yields surged heading toward weekend, triggered by reversal of safe haven flows, amid fresh hopes for maintaining Greece in the EU ahead of talks between the country’s government and European authorities.
- Asian dollar credit market saw mild recovery following earlier week losses, amid optimism over the Greek bailout, alongside the gains in Chinese stock markets. Apart from that, sovereign CDS levels were also tightened by up to 10bps on Friday amid improved risk appetite.
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