US Treasuries weakened with yields up 4-7bps across the curve, in conjunction with upticks in both stock markets and crude oil prices on Tuesday. Flows continued to flow to-and-fro between safe and riskier assets, and this time UST saw shorts as playe

Market Roundup

• US Treasuries weakened with yields up 4-7bps across the curve, in conjunction with upticks in both stock markets and crude oil prices on Tuesday. Flows continued to flow to-and-fro between safe and riskier assets, and this time UST saw shorts as players continued to assess Trump’s protectionist rhetoric amid still unclear fiscal plans. Safe havens also backed down as the UK supreme court ruled Brexit still required passing at UK parliament.
• Ringgit govvies remained well bid on the back of improved risk-on sentiment following the weaker of USD and recent UST gains. However, the net buying sentiment was slightly dampened amid some intraday reversal in UST movement. On the other hand, WI for the 10-year GII was quoted at 4.24/23%, much tighter than 4.33/27% heard a day prior.
• Thai sovereign curve steepened as front-end yields declined slightly within 1bps while mid- to long-end yields rose about 2bps as foreign players sold off bonds longer than 1-year tenor about Bt2.44 billion. The 20-year bond yield rose 2-3bps as the market prepared for auction of LB366A. As LB366A was dealt in weaker tone with higher closing yield at 3.29% on Tuesday and the auction size of the series is small at Bt8 billion. We expect adequate demand from locals and buying-on-dips are expected whilst bid-cover at or slightly above 1.0. We project upside on the yield at 3.3%-3.5% range. Unlike bonds, THB IRS rates declined about 1bps in the mid-and long-end segment possibly due to Trump's protectionism led to negative sentiment.
• Indonesian govvies opened on strong tone, continuing the prior day’s upward movement, as buyers were lurking around the front and bellies of the curve. However near closing hours, some profit taking pressure was seen thus limiting the upside, with yield curve steeping at the close. MoF held IDR syariah bond auction with IDR6 trillion target, and as expected, incoming bids were quite strong at IDR23.7 trillion and government upsized the issuance to IDR6.305 trillion.