Market
Roundup
- US Treasuries weakened amid mixed macro data and weighed down by upward trending crude oil prices amid growing expectation of a potential oil output freeze led by both OPEC and non-OPEC members. Brent as about $48.22 this morning. In addition, risk-on sentiment also sent yields higher, as DJIA marked a new high at 18636 Monday. The 10T yield rose mildly to 1.56%, after hitting the low at 1.48% late last week. Meantime, the Empire manufacturing index was disappointing with a subdued reading of -4.21 for the month of Aug, in contrast to 2.00 forecasted earlier. Focus will be on Jul inflation data, where consensus sees at +0.9% yoy, in contrast to +1.0% a month prior.
- USD further weakened amid mixed macro data releases and increased expectation the Fed is not mulling a quicker than expected rate hike. The DXY index edged lower from 95.72 to 95.63. EUR/USD appeared to be well-supported and hovered below the resistance of 1.1200. Aside, USD/JPY consolidated in a narrower range of 100.80-101.50 on Monday.
- Ringgit government bonds remained well-supported on what we think as outlook for lower interest rates going forward. Last week’s release of decent 2Q2016 GDP at 4.0% aided interest for bonds. On Monday, firm crude oil price with Brent up to $47.10 per barrel and MYR dipping below 4.0100 versus 4.0244 last week further boosted interest in the market.
- Thai government bonds and the currency were little changed as sentiment was largely unaffected by release of steady 2Q2016 GDP – at 3.5% yoy or exceeding earlier consensus of +3.3%. THB was about 34.624 late Monday from 34.623 last Friday. 1H2016 growth is 3.4% or in line with the full year targeted growth of 3.0-3.5% by the NESDB.
- IDR government bonds were mostly traded in a tight range ahead of the weekly debt auctions Tuesday, which will include the benchmark 10- and 15-year papers.
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