US Treasuries ended on a firm note with late net buying interest post release of the recent FOMC meeting minutes. Overall, the tone of the meeting was less hawkish than more recent Fed-speak (including recently more hawkish statements fr

Market Roundup

• US Treasuries ended on a firm note with late net buying interest post release of the recent FOMC meeting minutes. Overall, the tone of the meeting was less hawkish than more recent Fed-speak (including recently more hawkish statements from Yellen). Though FOMC minutes pointed to rising rates ‘fairly soon’ there was no overwhelming signals that, especially amongst voting members, the interest rate hike is coming in fast with the scale and timing of Trump’s proposed taxes uncertain.
• USD weakened with the DXY slightly down to near 101.28 amid lessened worries over Le Pen’s chances in French polls due Apr. EUR/USD seen above 1.0540 this morning from near 1.0500 overnight. USD also didn’t gain from FOMC minutes. Despite remarks in the minutes suggesting rates will be hike ‘fairly soon’ there was also doubts over Trump’s tax plans. Most policymakers suggested it would take ‘some time’ for potential impact of a Trump fiscal plan to be ascertained.
• Ringgit-denominated govvies strengthened in the early trading session on Wednesday, but net buying interest eventually eased and gains in govvies were pared following the release of higher-than-expected Jan CPI. The inflation data came higher than expected at +3.2% yoy, above consensus +2.7% and Dec +1.8% yoy. Meantime, foreign reserves stood unchanged at $95 billion as at 15 Feb, in contrast to two weeks prior.
• The Thai LB curve steepened and yield rose 1-2bps within intermediates (5-10 year tenors) and 30-year tenor after the auction (Bt12 billion) 30-year LB466A was cleared with high yield of 3.575% and average yield at 3.54%, 21bps higher than previous auction on November 30. As expected, the supply of LB466A was well-received by regular long-term investors (insurance companies) at 1.75 bid-to-cover ratio and some of them demanded higher yields causing a long tail auction result.
• Indonesian government bond market traded up ahead of FOMC meeting minutes release. Interbank trading looked to be in play, with most real money players taking a wait-and-see approach, except some local investors who were bidders in the 20-year bucket. Market volume decreased to IDR8.9 trillion and was dominated by bonds maturing between 5 and 10 years (44%).