US Treasuries weakened along with sharp rebound in stock markets, after news the FBI cleared Clinton of further criminal implications in the email case. Assuming a Clinton win, we expect UST weakness on safe haven outflow. A

Market Roundup

• US Treasuries weakened along with sharp rebound in stock markets, after news the FBI cleared Clinton of further criminal implications in the email case. Assuming a Clinton win, we expect UST weakness on safe haven outflow. Adding a cautious tone of a Dec Fed hike, we maintain short term 10T target at 1.92%.
• There was muted trading interest in Ringgit government bonds, with thin daily volume amounting to RM863 million registered on Monday. Aside, the weaker-than-expected non-farm payrolls failed to stimulate flows, as players await the US presidential election outcome. Elsewhere, we have economic data on tap this week, which include 3Q2016 GDP (consensus +4.0% yoy) and Sep industrial production (consensus +4.0% yoy).
• On the flipside, S&P affirmed Malaysia’s sovereign ratings at A and A- for local and foreign currency ratings, with Stable outlook, citing its strong external position and high monetary flexibility, whilst the fairly diverse economy should be able to absorb further weakness in O&G sector.
• Thai govvies closed a tad weaker as sentiment remained guarded approaching the US presidential election. Flows further shrank on Monday, recorded at Bt8.0 billion, down from Bt10.2 billion garnered on last Friday. We expect more consolidation this week, targeting range for 10-year govvies of 2.18-2.27%. BoT meets this week and we don’t see the central bank to move interest rates lower as yet.
• Another quiet day in the Indonesian bond market as market is waiting for this week’s US election outcome. There was little reaction to the Friday’s demonstration incident in Jakarta and US job data release. The 3Q2016 GDP reported slightly weaker numbers in contrast to market expectation as well as previous quarter (3.20% vs 4.02% qoq in 2Q, 5.02% vs 5.18% yoy in 2Q). Similarly, trading interest remained muted post GDP report release.