US Treasury yield curve ended bear steepening, as long term bonds were under pressure in conjunction with a weak 30T auction. On top of that, the cautious sentiment ahead of FOMC

Market Roundup

• US Treasury yield curve ended bear steepening, as long term bonds were under pressure in conjunction with a weak 30T auction. On top of that, the cautious sentiment ahead of FOMC meeting slated for 20-21 Sep also pushed the yields higher across the curve, amid a lack of support in the safe haven assets despite the declines in stock market and crude oil.
• Ringgit government bonds were thinly traded and closed on weaker footing, pressured by lower oil prices and weaker Ringgit. Expect flows to remain light ahead of FOMC meeting, particularly in this holiday-shortened week. Meantime, WI for the 5-year MGS was last heard at 3.21/185%, higher than 3.19/16% quoted last Friday.
• THB denominated sovereign bonds closed a tad firmer alongside lower IRS rates across the curve on Tuesday. We think that pressure on Thai bonds eased following some dovish comments made by Fed members early the week, but sentiment should remain guarded ahead of FOMC meeting scheduled on 20-21 Sep.
• Indonesian government bonds were traded lower in price in line with weaker Rupiah. Softer demand on bonds were also reflected in Tuesday's bond auction, where government received only IDR16.5 trillion of incoming bids, and decided to issue IDR12 trillion, same as initial target. Market rebounded a bit after auction result announcement, as local investors bought on dips, sending yield curve up by 5-6 bps on average. Market volume decreased to IDR7.2 trillion and dominated by bonds maturing in over 10 years (50%) and money market bonds (21%).