Local govvies market today saw very strong 2-way price action across the curve and very healthy liquidity amongst benchmark stocks. Local Islamic accounts were driving the buying flows in the morning over the GII benchmarks while foreign flows were concentrated in the MGS space, especially the back end of the curve. Many traders took the opportunity to take

Today’s trade recap by our trading desk:-
·         Local govvies market today saw very strong 2-way price action across the curve and very healthy liquidity amongst benchmark stocks. Local Islamic accounts were driving the buying flows in the morning over the GII benchmarks while foreign flows were concentrated in the MGS space, especially the back end of the curve. Many traders took the opportunity to take profit on their inventory nearing the end of the month which kept liquidity healthy and yields range bound throughout the day. Malaysia’s CPI for Jan2017 rose 3.2% YoY vs a 2.7% expected rise. This was mainly contributed by the rising fuel pump prices last month. The bond market was unmoved by the higher than expected CPI number while MYR strengthened slightly by 50 pips to 4.4530 level.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 3.325 -0.5 25 5-yr 3.710 0.0 2 7-yr 3.915 +1.0 224 10-yr 4.045 -0.5 187 15-yr 4.480 -1.0 726 20-yr 4.620 0.0 17 30-yr 4.735 -3.5 77 Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.495 0.0 3-yr 3.625 0.0 5-yr 3.790 1.3 7-yr 3.900 0.5 10-yr 4.065 0.5 Source: Bloomberg, AmBank