· Local govvies dragged by MYR weakness, sending the belly to long-end higher by 3 to 7 bps. The MYR traded at its 8-months low against the greenback at 4.2242 today, with sentiments continued to be unfavourable to the currency towards the

Good Evening,
Today’s trade recap by our trading desk:-
·         Local govvies dragged by MYR weakness, sending the belly to long-end higher by 3 to 7 bps. The MYR traded at its 8-months low against the greenback at 4.2242 today, with sentiments continued to be unfavourable to the currency towards the end of day. BNM conducted the re-opening of MYR3.0 billion 10-year GII 09/26 today with a decent bid-to-cover of 2.023 times, however, the bond couldn’t escape from the sell-down, ended the day 3 bps higher at 3.84% from the average issued yield. Overall, the selloff was mainly due to panic selling as traders trimmed exposure to weather high volatilities. We are of the view that current levels are attractive to begin new investment with two main reasons 1) USDMYR at 8-moths high to attract new foreign investment and 2) 5-year historical mean spread of 10-year MGS to OPR at c. 70bps, current spread at 66bps.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 2.920 0.0 24 5-yr 3.390 +7.0 57 7-yr 3.515 +3.0 83 10-yr 3.660 +3.0 208 15-yr 4.080 +3.0 2 20-yr 4.190 0.0 20 30-yr 4.520 - - Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.370 +0.0 3-yr 3.430 -0.5 5-yr 3.580 -0.5 7-yr 3.735 -1.0 10-yr 3.920 -3.0 Source: Bloomberg, AmBank
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