Local bond space took a hit today as risk appetite throughout the EM regions eased off today on the back of IMF cutting forecast of global growth this year by 0.1% to 3.1%. MYR weakened to 4.0300 levels in tandem with other Asian currencies as the USD gain some strength.

Today’s trade recap by our trading desk:-
·         Local bond space took a hit today as risk appetite throughout the EM regions eased off today on the back of IMF cutting forecast of global growth this year by 0.1% to 3.1%. MYR weakened to 4.0300 levels in tandem with other Asian currencies as the USD gain some strength. Bond yields gained 3-4bps today on very thin volume as there was no liquidity in the market with many on the sidelines. Malaysia CPI YoY for June also came in lower than expected at +1.6% vs 1.8% exp. WI was done at 3.37 & 3.36 level today and last quoted at 3.39-37.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 2.850 +4.0 47 5-yr 3.200 +1.0 0 7-yr 3.415 +3.0 41 10-yr 3.620 +4.5 30 15-yr 3.910 +2.0 257 20-yr 4.175 +3.5 10 30-yr 4.515 - - Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.370 0.5 3-yr 3.410 2.5 5-yr 3.488 2.7 7-yr 3.615 3.5 10-yr 3.770 3.0 Source: Bloomberg, AmBank
Local News:
·         Malaysia’s consumer price index (CPI) in June increased 1.6%. June inflation was driven by higher prices of alcoholic beverages and tobacco, as well as water and electricity, which were offset by a decrease in transportation, communication, and apparel costs.