Market Roundup • US Treasuries pared earlier week gains on the back of reversal in safe haven demand after the Brexit campaigns were suspended following the murder of UK MP. Also, Treasuries responded to higher oil prices, as Brent crude oil rebounded by more than 4% and closed at $49.17/bbl on Friday. But the Brexit vote is still scheduled this week for 23 Jun. The FT poll is now even at 44% each for Remain or Leave. • Aside, in Fed-speak, markets were surprised by comments from St Louis Fed president and voting member James Bullard, who recently voiced support for as many as four rate hikes this year, saying he only thinks there would only be one interest rate hike through year 2018. This week, Fed chief Janet Yellen will address Congress at her semiannual monetary policy testimony. • Ringgit sovereign papers were dealt in narrow ranges, amid light flows totalling RM929 million on Friday. In the next couple of days, we expect Malaysia’s and the rest of regional and global government bond market to be pressured ahead of the upcoming Brexit referendum. • Thai govvies closed slightly firmer, supported by expectation of slower pace in Fed tightening as well as tracking the recent gains in UST amid flights for safe-haven assets. Daily trading volume was relatively light at Bt16.3 billion (in contrast to Bt29.8 billion a day prior), led by LB206A, which was transacted by Bt7.3 billion. Sentiment in the govvies market may turn guarded ahead of the MPC meeting, but there could be pressure amid the Bt10 billion sale of LB666A on 22 Jun. • Indonesian government bonds barely moved following BI decision to cut the BI rate by 25 bps to 6.50%. Market went sideways due to risk-off mode caused by Brexit worries. Foreign onshore banks were on the offer side, keeping prices at bay until market closed. We think market will remain to see range-trading ahead of upcoming Brexit vote. Market volume remained steady amounting to IDR8.4 trillion, dominated by bonds maturing in over 10 years (42%) and maturing 1-5 years (35%).

Market Roundup

• US Treasuries pared earlier week gains on the back of reversal in safe haven demand after the Brexit campaigns were suspended following the murder of UK MP. Also, Treasuries responded to higher oil prices, as Brent crude oil rebounded by more than 4% and closed at $49.17/bbl on Friday. But the Brexit vote is still scheduled this week for 23 Jun. The FT poll is now even at 44% each for Remain or Leave.
• Aside, in Fed-speak, markets were surprised by comments from St Louis Fed president and voting member James Bullard, who recently voiced support for as many as four rate hikes this year, saying he only thinks there would only be one interest rate hike through year 2018. This week, Fed chief Janet Yellen will address Congress at her semiannual monetary policy testimony.
• Ringgit sovereign papers were dealt in narrow ranges, amid light flows totalling RM929 million on Friday. In the next couple of days, we expect Malaysia’s and the rest of regional and global government bond market to be pressured ahead of the upcoming Brexit referendum.
• Thai govvies closed slightly firmer, supported by expectation of slower pace in Fed tightening as well as tracking the recent gains in UST amid flights for safe-haven assets. Daily trading volume was relatively light at Bt16.3 billion (in contrast to Bt29.8 billion a day prior), led by LB206A, which was transacted by Bt7.3 billion. Sentiment in the govvies market may turn guarded ahead of the MPC meeting, but there could be pressure amid the Bt10 billion sale of LB666A on 22 Jun.
• Indonesian government bonds barely moved following BI decision to cut the BI rate by 25 bps to 6.50%. Market went sideways due to risk-off mode caused by Brexit worries. Foreign onshore banks were on the offer side, keeping prices at bay until market closed. We think market will remain to see range-trading ahead of upcoming Brexit vote. Market volume remained steady amounting to IDR8.4 trillion, dominated by bonds maturing in over 10 years (42%) and maturing 1-5 years (35%).