UST yields continued to rise, guided by positive economic data releases on Thursday. Housing starts rose to 1226k in Dec, beating consensus 1188k and previous month’s 1102k. Initial jobless claims dipped to 234k as at 14 Jan, from 2

Market Roundup

• UST yields continued to rise, guided by positive economic data releases on Thursday. Housing starts rose to 1226k in Dec, beating consensus 1188k and previous month’s 1102k. Initial jobless claims dipped to 234k as at 14 Jan, from 249k registered a week earlier.
• On the other hand, ECB maintained its policy stance in the latest meeting, while the president Mario Draghi played down the taper talk, despite pickup in inflation, saying that it would need to be evidenced by further inflationary strength. However, German bund prices fell as speculations on tapering remain on the table due to the higher inflation anticipation.
• The greenback stood on stronger footing ahead of US president-elect Trump’s inauguration on Friday, with DXY index edged higher from 100.93 to 101.50. Meantime, USD/JPY trended higher to around 115.00, from the lows at 112.57 earlier this week.
• Malaysian sovereign bonds closed mixed, amid selling pressure driven by hawkish comments made by Fed chief during mid-week. Trading volume remained decent at RM2.0 billion, despite lower than RM2.7 billion garnered a day prior. Bank Negara Malaysia chose to keep the Overnight Policy Rate (OPR) unchanged at 3.00% at the Monetary Policy Committee (MPC) meeting, in line with our and consensus expectations. While the ringgit has stabilised, the fragile sentiment and capital market volatility remained key preoccupations, warranting a reference in the Monetary Policy Statement to “heightened uncertainty and downside risks to global growth… from risks of protectionism, geopolitical developments and commodity price volatility”.
• Thai sovereign bonds pared gains, weighed by the slump in overnight UST guided by hawkish comments made by Fed chief Janet Yellen. The weaker sentiment also sent the IRS rates higher by about 4bps in average across the curve. Meanwhile, foreign players turned to net sellers by offloading Bt4.7 billion worth of Thai bonds on Thursday, after buying spree for five consecutive days.
• Indonesian government bond market traded down in price on Thursday following Yellen's hawkish comments on Wednesday night, in line with US Treasury movement. IDR govvies look well supported, with buyers keep bidding, amid buying-on-dips interest. As widely expected, BI kept 7-day reverse repo unchanged at 4.75% in BI meeting. Market volume dropped to IDR9.6 trillion and was dominated by bonds maturing in over 10 years (48%).