CIMB Daily Fixed Income Commentary - 07 Oct 2015

Market Roundup

• US Treasury yields closed a tad lower across the curve on Tuesday, driven by disappointing exports number reported for the month of August. The August exports fell to $186.1 billion, about 6% yoy decline. On top of that, yields were weighed lower by the slower growth outlook after the IMF slashed the global growth forecast in 2015 and 2016 from 3.3% and 3.8% to 3.1% and 3.6% respectively.
• Malaysian sovereign bonds strengthened on the back of positive sentiment, but gains were slanted towards off-the-run papers along with longer dated MGS benchmarks, shifting the yield curve flatter on Tuesday.
• Thai govvies posted gains amid greater risk-on sentiment spurred by soft US NFP release last Friday. Focus was on LB196A and LB21DA, which contributed combined volume of Bt8.1 billion throughout the day. Meantime, USD/THB hovered at 36.35 late Tuesday, with support at 36.25.
• Indonesia government bond market continued its bullish movement, Rupiah rallied to 14,200 level on the back of inflows on bonds & stocks (JCI +2.35%). Interbank foreign names still bid aggressively in morning session, chased bonds especially in 5-year and 15-year buckets. On London opening hour, some profit taking action was seen, stopped the rally and yield curve holding on at current level until market closed. We think bond market is still quite prone to more profit taking action at current level. Volume increased to IDR 11.6 trillion.
• Asian dollar credits were generally tighter, amid positive sentiment on Tuesday. Regional HY names extended gains. Pertamina May’43 was traded higher to 82.97pts, from 80.13pts a day prior, while Philippines Jan’24 inched higher from 110.99pts to 111.08pts.