CIMB Daily Fixed Income Commentary - 26 Nov 2015

Market Roundup

• US Treasuries posted mild gains amid the release of various economic data Wednesday ahead of the Thanksgiving’s break. Meantime, the Treasury Department sold $29 billion of 7-year securities.
• Amongst the macro data Wednesday included personal spending at below consensus of 0.1% in Oct, PCE core inflation at +0.1% mom against +0.20% forecast in Oct, durable goods orders at +3.0% or better than forecast of +1.7% in Oct and the new home sales at 10.7% mom in Oct against 6.8% consensus.
• USD/MYR is around 4.2120 this morning or lower since the day before. Meanwhile, supporting the Ringgit was higher crude oil prices with Brent around $46.17 per barrel this morning.

·  USD was firm with the Dollar index touching 100.17 overnight but has weakened a tad to around 99.760 this morning. A batch of mixed-to-weaker US economic data Wednesday conspired to lift but depress the Dollar. Aside, EUR/USD remains under pressure now at 1.0623 after touching 1.0566 overnight.

• Ringgit govvies extended gains in conjunction with lower USD/MYR (aided by crude oil rebound), which hit the low of 4.1835 during mid-week. The 10-year MGS benchmark saw heavy trading interest and closed lower at 4.18%. Elsewhere, WI for the 3-year GII was last heard at 3.58/54%.
• Thai govvies closed mixed, amid improved net buying sentiment seen on Wednesday, possibly driven by firmer THB as well as weak exports reported. On the other hand, the Bt9 billion auction for LB666A was well received, indicated by a bid-cover of 2.81 times, with an average yield of 3.8603%.
• The IDR bond market continued to rally supported by foreign players’ interest. Demand along the short tenors also buoyed longer tenor papers, with additional buying seen by local players.
• Asian dollar credit market saw thinner flows, while generally quoted a tad wider, amid geopolitical tension after a Russian jet was shot down near Syrian border. We think that the market may continue to see light trading until early next week.