CIMB Daily Fixed Income Commentary - 03 Sep 2015

Market Roundup

• US Treasury yields edged higher following the release of decent ADP number on Wednesday, pairing with recovery in stock markets. The Aug ADP showed a decent job creation of 190k, improved from 177k a month ago, despite a tad lower than 200k forecasted earlier.
• Malaysian government bonds pared gains after the strong rally since late last week. Meanwhile, sentiment was slightly dampened by the recent Fitch’s comment on potential downgrade on Malaysia’s credit rating outlook.
• Thai govvies reversed gains garnered earlier, while trading volume increased significantly from Bt13.2 billion to Bt24.0 billion on Wednesday. Highlight was on the reopening auctions for LB25DA (Bt10 billion) and LB446A (Bt5 billion), which were received with soft demand, indicated by bid-cover of 1.18x and 0.95x respectively. Apart from that, average yields stopped at 2.828% and 3.6905% each.
• Indonesia government Bond market was relatively quiet on Wednesday with wider bid-offer spread initially, 75c-100c in price, on risk-averse mode, with USDIDR went above 14,100. Nothing much happened in the market, with FR53 (Jul’21) bond recorded most traded volume today (IDR 1.56 trillion). We think market will still be cautious with some defensive buying. Volume was stable amounting IDR 12.7 trillion.
• Asian credits closed mixed during mid-week. Oil-related bonds were firm, despite the Brent crude oil dipped further from $49.56/bbl to $48.90/bbl. PTTEP perp inched lower from 97.80pts to 97.79pts, while Petrol 25 tightened by 5bps to T+242bps.