CIMB Daily Fixed Income Commentary - 05 Oct 2015

Market Roundup

• US Treasuries strengthened on the back of weak US NFP report, which recorded a total job creation of 142k for the month of Sep, far below consensus estimate of 201k. On top of that, the Aug NFP was revised lower from 173k to 136k, also exerted downward pressure to the UST yields on Friday. The 10T yield plunged from 2.04% to the intraday-low of 1.91%, before heading higher to 1.99%.
• Ringgit sovereign bonds ended on a mixed note Friday. There was some cautious mood ahead of the US non-farm payrolls data release as well as early session jitters due to lower crude oil levels and anticipated hit on the Ringgit. Nevertheless, the Ringgit was firmer by the close of trading, seen around 4.4140 against high of 4.4565 in the morning session.
• Along the Thai government bond market, short term papers closed within a tight range whilst longer tenor papers posted firm gains with yields down about 4-6bps along the 10- to 15-year tenors. Meanwhile, the Baht provided little help, as it remained hovering well above the 36.00 level (seen at 36.630 late Friday).
• The IDR government bond market was relatively quiet on Friday except along short dated tenors as local banks were seen buying 2.5-year SR07 retail bonds and some SPN bills. Net buyers also emerged in the 20-year bucket, with interest mostly emerging nearer the closing hour.
• Asian dollar credits weakened but trading activity was mostly muted ahead of the non-farm payrolls data release in the US. A firm performance around Asia’s stock markets on Friday did not manage to spur much of risk taking along the credit market. The iTraxx Asia ex-Japan high grade index moved wider by about 2bps Friday.