US Treasuries further weakened on the back of improved risk appetite in global markets.

Market Roundup

• US Treasuries further weakened on the back of improved risk appetite in global markets. Also, we think players preferred to lock in profits ahead of the quarter end, amid a lack of fresh catalyst to spur demand in safe-haven assets. The 10T closed above 1.50% at 1.52% (up 5bps).
• Ringgit government bonds further strengthened alongside stronger MYR against USD. It was about 4.0115 this morning. The RM2.5 billion 30-year MGS tender closed with a decent bid-cover of 2.369 times. Average yield was 4.613%, at spread of 4.59-4.63%, whilst marginally wider than WI level quoted at 4.63/60% on Tuesday.
• Corporate bonds were well demanded ahead of month-end. Investors continued to tap on higher yielding papers such as tranches from PLUS, Sarawak Energy and MEX II. Expect continued demand on Thursday amid a lack of fresh issues (anticipate to emerge post-Raya holiday).
• Thai government bonds came under profit taking pressure the recent gains and some ebbing of safe-haven flows. Daily volume surged to Bt41.1 billion led by LB25DA auction held. The LB25DA auction saw weak demand, with a low bid-cover of 1.15 times. Meantime, average yield stopped at 1.8708%, slanting to the high yield of 1.9000%, whilst low yield was generated at 1.8200%.
• Indonesian government bonds rallied on the back of tax amnesty news, which drove foreign players’ net bidding interest on all benchmark series and short dated bonds. BI also signaled more room for monetary easing, pushing bond prices even higher. We think bonds market will be supported in the short-and-long run. Market volume was heavy amounting IDR20 trillion and was dominated by bonds maturing in over 10 years (65%).