US Treasury yields edged lower across the curve, driven by buying-on-dips interest amid light

Market Roundup

• US Treasury yields edged lower across the curve, driven by buying-on-dips interest amid light trading activities on Tuesday. The Treasury Department sold $24 billion worth of 3T with a high yield of 0.85%. Demand was decent, indicated by a bid-cover ratio of 2.980 times, in contrast to average 2.933 times in the past twelve similar auctions conducted. Indirect bidders accounted for 56.9% of the total sales.
• Malaysian sovereign bonds continued to move in sideways, whilst flows remain thin with daily volume totalling RM1.3 billion on Tuesday. According to the latest data released by the central bank, overall foreign shareholding in govvies increased from 34.2% to 35.7%, whilst accounting 51.9% for the MGS for the month of Jul. We think that the foreign inflows may persist in the coming weeks, aided by yield hunting interest particularly following the BoE latest easing measure.
• Thai government bonds hovered near prior levels on Tuesday, amid a lack of fresh catalyst at this juncture. Overall sentiment remained slightly cautious whilst players are eyeing on the LB26DA auction slated for Wednesday.
• Indonesian government bond market opened with biddish tone amid improved sentiment prior to Syariah bond auction. After auction result announcement, in which government received IDR17.5 trillion worth of incoming bids and upsized the issuance to IDR6.08 trillion from initial target of IDR4 trillion, 10-year yield went down by 4bps to 6.80% as buyers were quite aggressively bidding 10-year FR56 benchmark bond and absorbed selling pressure at current level. Market volume improved to IDR7.4 trillion and dominated by bonds maturing in over 10 years (50%) and bonds maturing between 1 and 5 years (28%).