Market Roundup
- US Treasury yield curve bear-steepened, driven by profit taking activities triggered by rebound in crude oil prices and stock markets. Also, the yields were lifted by hawkish comment from Atlanta Fed President Dennis Lockhart, who stated that “he is confident that the interest rate normalisation by later this year is still operative, if recent market volatility settles down”.
- Ringgit govvies were dealt a tad weaker early this week, guided by drop in crude oil prices, alongside the weakening MYR against USD, which saw USD/MYR heading higher to above 4.2700 late Monday. The RM3 billion auction for GII Jul’22 ended with decent demand, indicated by a bid-cover of 1.915 times, while average yield closed at 4.222%, edged higher from WI level of 4.185% last Friday.
- THB denominated bonds extended gains, supported by firm net buying interest from the local players. Aside, trading volume edged lower from Bt16.7 billion to Bt11.9 billion, with focus on LB196A, which contributed Bt6.5 billion worth of transactions throughout the day. Upcoming highlight will be the reopening auction for LB296A, which was indicated with an issuance size of Bt6 billion.
- Indonesia government bond market traded down on Monday as USDIDR traded above 14,450 level again. Generally volume was thin with limited flows seen, only interbank transactions in short dated bonds < 5-year and small activity in 10-year bucket. We think investors are still reluctant to buy due to uncertainty over Fed rate rise and global outlook. Volume dropped to IDR 7.8 trillion only.
- Asian credit spreads widened, amid thin liquidity in the market, with Japan on holiday from Monday to Wednesday. Meanwhile, iTraxx ex-Japan IG Index was about 20bps wider at 146bps on Monday.
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