MY
& SG Bond Market Watch: A quarter of two halves is unfolding
·
Malaysia: We guided for a quarter of
two halves in our last quarterly outlook report and market seems to be playing
out the script we set. Since mid-May, the MGS curve had shifted 8-20bps higher
as the USD strength was rejuvenated by US Fed officials talking up the prospect
of rate hike in the summer months. Compounding pressure on the curve is the
back-to-back 10.5y and 5.5y MGS supply totalling MYR8b and the low 1.42x BTC in
the recent MGS auction has set a bearish tone. Our 10y MGS yield forecast is
unchanged at 4.00% by end-2Q16, implying additional weakness ahead.
·
Singapore: SGS curve bear-steepened
along the 2y10y as regional currencies weakened against the USD and UST yields
suffered from some recent upward correction, although short-term SGD rates remain
stable. Cautious sentiment in the SGS market may be carried into June
especially in the first two weeks leading to the FOMC meeting. On UST, it is
possible for the 10y UST to retest the 2.00% handle since Jan-2016.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.