Fixed Income Daily Pulse, 02 June 2016

Good evening!
Today’s trade recap by our trading desk:-
·         A very quiet day as the local bond market continue to trade range bound in low volume; only saw some minor buying interest on the 5Y MGS which came off by 2bps. However, USDMYR had a very volatile day; the MYR weakened by 300 pips to a high of 4.1780 (pushing towards 200-DMA) during mid-day before coming back off to close at yesterday’s level of 4.1450. Equity markets continue to see foreign selling off  on the back of the recent rebalancing of MSCI equity index in which Malaysia’s weightage was decreased. Nevertheless, the foreign outflow of was supported by local funds buying the equities. Bond market was unmoved by the volatility in other markets. The yield curve ended the day slightly down by 0.5-2bps.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 3.255 -2.0 70 5-yr 3.580 -2.0 340 7-yr 3.840 0.0 289 10-yr 3.940 +0.5 56 15-yr 4.225 -0.5 0 20-yr 4.330 - - 30-yr 4.715 -1.0 20 Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.625 -0.5 3-yr 3.635 -1.5 5-yr 3.750 -2.0 7-yr 3.895 -2.5 10-yr 4.080 -2.0 Source: Bloomberg, AmBank
Local News:
·         None.