US Treasuries further weakened with 10T peaking at 1.73%, along with firmer stock and crude oil prices and the ISM non-manufacturing index beating estimates. Brent crude edged higher

Market Roundup

• US Treasuries further weakened with 10T peaking at 1.73%, along with firmer stock and crude oil prices and the ISM non-manufacturing index beating estimates. Brent crude edged higher from $50.87/bbl Tuesday to $51.86/bbl Wednesday, reacting to declines in US stockpiles. The ISM non-manufacturing index came out at 57.1 in Sep against 53.0 consensus and the prior month’s reading of 51.4. Durable goods orders expanded by 0.1% mom in Aug (consensus 0%), whilst factory orders grew by 0.2% during the same period (consensus -0.2%). However, ADP employment data registered lower-than-expected job gains of 154k in Sep (consensus 165k).
• Ringgit sovereign bonds weakened slightly with yields modestly higher along select benchmark papers only. Sentiment is guarded before this week’s release of the Sep non-farm payrolls numbers and news of possible early tapering of ECB’s asset purchases program (now €80 billion per month). Negative catalysts also include the weak Ringgit, which hovered above 4.1400 late in the day. Aside, tender for the auction of new 3-year GII closes Thursday. On Wednesday, WI for the new supply was heard dealt at 3.23%.
• Thai government bonds weakened Wednesday with the Baht also down (around 34.805 late Wednesday from 34.694 the day before). Nevertheless, there was foreign support – foreign investors were net buyers of Bt1.7 billion of Baht-denominated bonds Wednesday, but down from the larger net buy of Bt5.1 billion the day before.
• Thai corporate bonds also weakened alongside the weaker government bonds, with volume traded pretty heavy at Bt3.0 billion. Most heavily traded was A- rated TRUE22NA Nov’22 (Bt614 million traded), up 6bps to 4.01%.
• Indonesian government bonds were traded weaker in line with a weaker Rupiah. The market was pretty quiet on Wednesday as prices drifted lower, and sentiment felt offerish thought bids were still supportive. Traded volume increased slightly to IDR7.2 trillion, dominated by bonds maturing 5-10 years and 1-5 years.