CIMB Daily Fixed Income Commentary - 04 Nov 2015

Market Roundup

• US Treasury yields rose further across the curve, amid cautious sentiment heading into Friday NFP. The 10T yield touched intraday-high of 2.22%, before eventually settled at 2.21%.
• The greenback posted gains against major currencies, on the back of increased expectation for a Dec lift off. DXY Index resumed its uptrend to above 97.0, after the upward trend halted a day ago.
• Malaysian government bonds posted losses. While the USD/MYR was dealt a tad firmer around 4.2950 late Tuesday, we reckon that the selling pressure may be initiated by players trimming positions heading into MPC meeting, and the release of US NFP number.
• Thai govvies closed mixed on Tuesday. Foreign players turned to be net buyers (total amount of Bt160 million), after exerting net selling for two consecutive days, possibly driven by the stabilizing USD/THB.
• Indonesia government bond market traded firmer on the back of offshore buying flows following CPI data. Strong bids seen in 10-year buckets, sending yield curve down 10 bps in parallel. MoF held Syariah bond auction, which was downsized to IDR1.88 trillion from IDR2 trillion indicative target, with incoming bids reached IDR3.33 trillion. 6th round of stimulus package regarding taxation may be released by government this week, we think there will be no significant reaction in bond market, and market could be more sensitive to US jobs data and this month's BI MPC meeting. Aside, volume increased to IDR 9.5 trillion.
• Asian credits were dealt in narrow ranges, while flows remained thin on Tuesday. The newly priced China General Nuclear Power Corp 10-year bond tightened to T+189bps, from T+197.5bps priced earlier.