CIMB Daily Fixed Income Commentary - 25 Nov 2015

Market Roundup

• US Treasuries closed pretty unchanged on Tuesday, despite the yields edged lower earlier the day, weighed by geopolitical tension after the news reported that Russian jet was shot down near Syrian border.
• USD was dealt weaker against major currencies on Tuesday. DXY Index continued to be range bound at a lower range of 99.50-99.75. EUR/USD appeared to be well supported above 1.0600, and consolidated near 1.0645 late Tuesday. USD/JPY drifted lower and was looking to test the support at 122.50, from the peak of 123.26 a day prior.
• Malaysian sovereign yield curve bull steepened, with gains mainly driven by rally in MYR against USD. While Ringgit govvies strengthened generally across the board, focus was on short dated bonds with maturity less than 5-years.
• THB denominated sovereign bonds saw improved demand, guided by firmer THB. USD/THB went lower from 35.86 to 35.73. However, flows were slanted on the front end and bellies of the curve, as players continued to keep their portfolio duration short.
• Dollar credits were traded in softer tone, with iTraxx Asia ex-Japan IG Index ended 4bps wider at 130bps on Tuesday. Sentiment also turned slightly bearish, with regional CDS widened by up to 6bps. We reckon that flows may remain quiet heading into US Thanksgiving holiday.