Market Roundup
- US Treasury yield curve ended flatter on Friday, as the stock market declines and weaker-than-expected non-farm payrolls weighed on the longer dated bond yields. Despite the NFP data was below market expectation, players remained guarded for a possible September lift-off, hence pushing the 2T yield a tad higher to 0.71%. NFP recorded a smaller-than-expected job creation of 173k for the month of August, against 217k forecasted earlier. Meantime, the unemployment rate dipped further from 5.3% to 5.1% during the same period.
- USD posted little losses against major rivals after the release of mixed job reports. EUR/USD was firmer at 1.1149, rebounded from the support level at 1.1100. Elsewhere, USD/JPY trended lower from the crucial level of 120.00 and closed at 118.99.
- Malaysian strengthened with the sovereign yield curve ending steeper, guided by decent bidding interest across the front end and bellies of the curve. We think some off-the-run papers (such as MGS Sep’17) offer decent yields, following the recent rally of MGS benchmarks.
- Thai government bond yields hovered near prior levels on Friday. Apart from that, daily volume shrank drastically from Bt24.5 billion to Bt9.6 billion, amid a lack of clear guidance at this juncture.
- Indonesia government bonds drifted lower again on weaker IDR. We were seeing better selling across the curve with few defensive bids particularly in 10-year tenor. The volume trading was thin while market in general was quiet. We believe people will be sidelined at the moment and remain better sellers. Aside, volume dropped to IDR 8 trillion.
- Dollar credits were seen little changed amid muted activities, as investors continued to stay at the sidelines for further guidance from Friday NFP data. iTraxx ex-Japan IG Index widened 1.5bps to 141 last Friday.
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