CIMB Daily Fixed Income Commentary - 07 Apr 2016

Market Roundup

• US Treasury yields climbed on the back of improved risk sentiment, alongside the gains in stock market and crude oil prices. Meantime, the latest FOMC minutes revealed the Fed members showed concerns on the global economic and financial developments, whilst taking a cautious approach in raising rates. However, several policymakers viewed that a hike in FFR is warranted in upcoming Apr meeting, if the economic data are in line with their expectation, whilst a couple of Fed members thought that it would be appropriate to hike the FFR to the range of 0.50-0.75% in the Mar meeting, citing that “the economy grew at a moderate rate despite developments abroad and earlier volatility in financial conditions”.
• Ringgit govvies closed mixed during mid-week, while activities were slanted towards the front end of MGS curve, and longer end of the GII papers. WI for the 7-year GII reopening was last heard at 3.935/91%.
• Thai bond market closed on Chakri Holiday.
• Indonesia government bond market traded in tight range on Wednesday’s opening until the break, however buyers emerged in afternoon session, bidding especially in 10yr-15yr space until market closed. Bond looks consolidated at current level. We feel 3yr yield looks prone to go up, with market players preparing room to start trading newly issued 3yr retail bond (SR08) in secondary market starting next week. Market volume increased to IDR13.9 trillion.