There was firm demand at the latest Treasury auction, being the 5-year securities worth $

Market Roundup

• There was firm demand at the latest Treasury auction, being the 5-year securities worth $34 billion whilst macro data showed a drop in existing home sales to 5.39 million in Jul from 5.57 million and below consensus of 5.51 million. Meantime, crude weakened with WTI down about 3% to $46 per barrel. However, UST showed little strength as we think players were generally holding off bets ahead of Janet Yellen’s Friday speech at Jackson Hole. By closing, yields saw uptick of 2-3bps.
• Malaysian government bonds were seen with thin trading interest until the release of Jul inflation data, which came out at +1.1% yoy, or lower than consensus +1.2% and Jun +1.6%. The soft inflation data spurred buying interest in Ringgit bonds, amid speculation of further easing by central bank in the next MPC meeting slated for 7 Sep. Meantime, WI for the 10-year MGS was last quoted at 3.54/53%.
• Thai sovereign yield curve ended higher and steeper, as longer yields were pressured higher in conjunction with the LB466A auction held Wednesday. Demand was poor for the auction, as the final issuance was lower at Bt7.73 billion, compared to indicative size of Bt11 billion. Bid-to-cover ratio was subdued at 0.74 times, while the average yield stopped at 2.8027%. We reckon the incoming Bt11 billion LB366A auction scheduled next week may add more pressure long bonds in the short term period.
• Indonesian government bond yield curve rose further. Locals were seen on the bid side, supporting the market, while offshore banks remained net sellers. MoF held debts-witch auction, attempting to extend market duration by switching short dated bonds with maturity below 5 years into 15-year FR73 and 20-year FR72. However, after receiving just a paltry IDR216 billion of offers from the market, MoF decided to award nothing. Bids improved in the market after the debt-switch announcement until closing time. Market volume decreased to IDR8.8 trillion and was dominated by bonds maturing in over 10 years (53%) and bonds maturing between 1 and 5 years (28%).