US Treasury yields closed marginally lower across the curve, amid mixed reaction from the decent economic data releases and late buying actions driven by risk-aversion sentiment, alongside the dips in stock market and crude oil prices.

Market Roundup

• US Treasury yields closed marginally lower across the curve, amid mixed reaction from the decent economic data releases and late buying actions driven by risk-aversion sentiment, alongside the dips in stock market and crude oil prices.
• Ringgit govvies posted little gains, in conjunction with firmer MYR (USD/MYR hovered at 4.03 on Tuesday) and crude oil prices, amid improved sentiment. Trading activities were heavy at RM4.3 billion, with focus on shorter dated papers including MGS Mar’19, Sep’21 and Nov’21.
• Thai sovereign yield curve ended flatter, with front end yields edged higher by 1-2bps on Wednesday. Meantime, the Bt10 billion LB666A auction was well received with a decent bid-cover of 2.24 times, whilst average yield stopped at 3.0227%, in between a spread of 2.9980-3.0380%.
• BoT kept its policy rate unchanged at 1.50%, in line with market expectation. The policymakers highlighted the risks from soft global economic recovery, monetary policy divergence among major advanced economies, Brexit referendum outcome, as well as financial stability concerns in China. However, on the positive side, they noted that economy would continue to recover, and inflation would return to the target band within the second half of the year as previously expected.
• In general, Indonesian government bond market traded in tight range. However we noted some buying flows near closing hours, buying 5-, 10-, and 15-year benchmark bonds. Same story as Tuesday, market players were mostly on the sideline on Wednesday. Hence, activities suppressed, while waiting for Brexit vote. Yellen's speech on Tuesday signalled that Fed's stance may be holding on for raising the Fed funds rate for a prolonged period. Market volume increased to IDR10.8 trillion and dominated by bonds maturing in over 10 years (58%) and bonds maturing between 5 and 10 years (28%).