US Treasuries reversed losses and were traded firmer, reacting to the lower crude oil prices and profit taking pressure in stock markets on Thursday.

Market Roundup

• US Treasuries reversed losses and were traded firmer, reacting to the lower crude oil prices and profit taking pressure in stock markets on Thursday. DJIA slipped to 18517 from the higher range near 18600.
• Malaysian sovereign bonds were under selling pressure in conjunction with weaker Ringgit on Thursday. The 5-year GII reopening auction ended with decent demand, as bid-cover reached 2.45 times for an issue size of RM3.5 billion. However, due to the weaker sentiment, average yield was generated at higher 3.401%, in contrast to WI of 3.39/37% quoted a day prior the tender closed.
• Thai government bonds continued to show weakness, tracking the losses in overnight UST movement. Trading flows were thinner, totalling Bt12.4 billion, dipped from Bt18.9 billion recorded during mid-week. On the other hand, USD/THB inched lower and hovered at 35.00 late Thursday. We expect the currency pair to be well supported at the range of 34.80-35.00 heading into next week FOMC meeting.
• Overall Indonesian government bond market weakened on Thursday although it opened with very biddish tone on expectation of BI rate cut. It turned out BI kept the rate unchanged, sending bond prices lower, where local players still provide supporting bids. We think the correction after BI rate decision will be temporary, and market players will try to buy on dips. Volume decreased to IDR10.9 trillion and was dominated by bonds maturing in between 1 and 5 years (40%) and in over 10 years (38%).