Overnight, US Treasuries weakened and stock markets gained in anticipation of a Clinton win. In addition, UST only fared decently at the $24 billion sale of the 3T.

Market Roundup

• Overnight, US Treasuries weakened and stock markets gained in anticipation of a Clinton win. In addition, UST only fared decently at the $24 billion sale of the 3T.
• USD gained on peers on market optimism of a Clinton win. Elsewhere, markets supported USD after the soft China exports numbers and weak German and UK industrial production figures. Elsewhere, USD was decently buoyed as voting FOMC member and Chicago Fed president Evans remarked that a rate hike in Dec looks reasonable, though adding he wasn’t confident of the upward trajectory of inflation. Yet he said growth looked pretty decent. China’s exports fell by 7.3% yoy in Oct and Germany’s industrial production fell 1.8% mom in Sep. UK’s industrial production fell 0.4% in Sep.
• There were heavier trading flows totaling RM1.7 billion in Ringgit sovereign bond market, as contrast to RM863 million a day prior. However, players continued to stay at the sidelines, causing the yield curve ended little changes on Tuesday. We also still await the 3Q2016 GDP, with consensus estimates of +4.0% yoy (4.0% in 2Q2016). Foreign holdings increased to 36.0% of outstanding Malaysian government bonds in Oct, after taking a dip to 35.4% in Sep, from 35.9% a month earlier. Notably, foreign holdings in GII rose to the high at RM30.3 billion for the first time.
• Thai sovereign bonds hovered near prior levels, while players remained cautious ahead of the US election outcome. Daily volume edged lower from Bt8.0 billion to Bt7.3 billion, led by short dated LB21DA and LB196A. Elsewhere, market expects BoT to maintain its policy rates at 9 Nov meeting.
• IDR government bond market firmed post-bond auction, in which the government received IDR22.5 trillion incoming bids, much higher compared to the previous auction (IDR15.5 trillion). The government upsized the issuance to IDR12.9 trillion from IDR10 trillion target, and only need another IDR8 trillion to fulfill their target in the next auction (last in 2016). The incoming bids were pretty substantial considering the circumstance (prior to US election). The market was dominated by bonds maturing between 5 and 10 years (46%).