Wednesday, September 2, 2015

CIMB Daily Fixed Income Commentary - 02 Sep 2015


Market Roundup
  • US Treasuries recovered losses amid stock market declines, triggered by renewed concerns on the subdued growth following the release of weak China data. 10T yield reached the technical support at 2.15%, while next support level will be near 2.05%. Meantime, DJIA down by 2.8% to 16,058 on Tuesday.
  • Ringgit government bonds staged another rally after the long weekend, as sentiment was boosted by the sharp recovery in crude oil prices. Gains were slanted on the front end and bellies of the curve.
  • Thai sovereign bonds posted little gains, amid heavier trading interest amounting Bt13.2 billion on Tuesday. On the macro side, the headline CPI remains in the negative territory at -1.19% for the month of August.
  • IDR government bond market opened lower by 25 cents in price following weakening IDR currency. Auction sent weak sentiment as well in which people asked for higher yield due to risk averse environment. Government awarded IDR 10 trillion out of IDR 16.4 trillion of incoming bids. Market was lower post-auction result as the cut off yield was away 10-12 bps from the market level. We expect market have tendency to go lower from here but believe bottom fisher will emerge. Volume returned to normal level amounting IDR 12.8 trillion.
  • Asian dollar credits widened in general, but selected oil-related names were better supported, guided by the strong rebound in crude oil prices. Aside, iTraxx ex-Japan IG Index widened by about 7bps at 138bps since last Friday.

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