CIMB Daily Fixed Income Commentary - 11 Aug 2015

Market Roundup

• US Treasuries pared gains on Monday, amid a lack of fresh guidance from economic reports, paring with a decent rebound in crude oil prices.
• Malaysian govvies closed mixed, alongside the weakening Ringgit on Monday. On the other hand, trading volume was thin at RM804 million. WI for the 5-year MGS reopening was taken at 3.81-3.82% before eventually rose to 3.840/825% amid weak sentiment.
• Thai govvies ended near prior levels early the week, amid quiet market, as daily volume shrank further from Bt11.9 billion to Bt7.0 billion on Monday. We expect the government bonds to move in narrow range in the near term, while trekking the UST movement, ahead of the 2Q2015 GDP slated for next week.
• Indonesia government bond market was range bound in a quiet market, no flows were seen in the market. MoF will be holding Syariah bond auction today with IDR 2.5 trillion target. We think the auction will be concentrated on short dated bonds, 5yr and below. We think market could be under pressure ahead of next week's conventional bond auction, however support buying is expected to emerge in previous buying levels. Volume remained small amounting IDR 4.2 trillion only.
• Asian credits were thinly traded in conjunction to the long weekend in Singapore. Among the recent issues, Greentown 5NC3 maturing 2020 was traded almost unchanged at 5.88%, while China Merchant’s new 5-year paper was held firm at T+177bps.