US Treasury yields dipped across the curve, supported by late buying interest amid de

Market Roundup

• US Treasury yields dipped across the curve, supported by late buying interest amid declines in stock market due to profit taking activities by end of first quarter. Economic data releases were generally in line with market expectations. Personal income and personal spending rose by 0.4% and 0.1% each in Feb, against consensus 0.4% and 0.2%. Meantime, PCE core was +1.8% during the same period, slightly above economists’ forecast at 1.7%. Upcoming releases on tap this week include factory orders, durable goods orders, FOMC meeting minutes and non-farm payrolls.
• Ringgit govvies securities moved sideways amid a lack of fresh catalysts. There was also bargain interest on the new 7-year MGS. However, flows were just decent at RM3.1 billion, focused on short dated papers.
• Economic data on tap this week will be Malaysia’s Feb 2017 trade numbers, where consensus anticipates exports and imports to grow 13.9% and 17.3% yoy. These consensus expectations are pretty solid numbers, seeing Jan’s exports and imports were +13.6% and +16.1% respectively. Apart from that, players will also be eyeing foreign reserves data as at 31 Mar. As at 15 Mar, reserves were at $94.9 billion.
• Net buying interest in Thai bonds remained solid amid firm quarter-end flows and demand from foreign players who bought Bt1.71 billion of short-end bonds and Bt2.15 billion of longer than 1-year bonds. Heavily traded were on the far-end of the curve (10-year tenor and longer) followed by intermediates. LB curve was extremely flat as yields tumbled 4-7bps. The 20-year LB366A posted solid gains with last bidding yield at 3.28%. Attractive plummeting yields bolstered profit taking flows from local players though they stayed at aggressive bids, indicating ongoing solid demand in Thai assets. Foreign demand for EM bonds continued to add downside risk to USD/THB and spot tested previous low about 35.33-35.34 around the end of official trading day.
• In contrast with past few days, Indonesian government bond market was quiet on Friday. However, we continued to see net buying interest on benchmark series especially FR61/FR59 and FR72. In general, the market was in wait-and-see mode as we will have CPI data this week. Market volume halved to IDR10.4 trillion and dominated by bonds maturing in over 10 years (55%).