Thailand: Bonds continued to gain (1-3bps decline) along mid- and long-ends following lower UST yield and US NFP below estimates. However, foreign investors cut positions in short- and long-term bonds by Bt2.61 billion and Bt624 million ahead of the BOT briefing of FX regulation. After the BoT announcement, the Baht rose as the market view the new relaxed rules provide little changes from existing rules.

Market Roundup

• US Treasuries weakened amid mild profit taking activities, despite economic data releases continued to disappoint on Monday. Factory orders fell 0.2% mom in Apr, in line with market expectation, while durable goods orders dipped by 0.8% mom during the same month, above 0.6% mom contraction forecasted earlier.
• Malaysia: Ringgit govvies started off with firm bidding interest following the firmer MYR. WI for the 20-year MGS was quoted at 4.56/53%, tighter than 4.58/53% last Friday. Meanwhile, Malaysia’s exports met market expectation with 20.6% yoy growth in Apr, while imports expanded by a smaller 24.7% yoy, in contrast to consensus +31.3%. Despite the positive trade data, market reacted little and closed mixed.
• Thailand: Bonds continued to gain (1-3bps decline) along mid- and long-ends following lower UST yield and US NFP below estimates. However, foreign investors cut positions in short- and long-term bonds by Bt2.61 billion and Bt624 million ahead of the BOT briefing of FX regulation. After the BoT announcement, the Baht rose as the market view the new relaxed rules provide little changes from existing rules. Most of accommodative outflows measures relate to more flexible process for retail investors to invest abroad, to transfer money out of the country, and hedge FX risks. In addition, the effort to induce investors to invest abroad, lend money to non-residents, and allow brokerage firms to quote FX is nothing new from the accommodate outflows measure that was firstly introduced in Apr 2015.
• Indonesia: IDR bonds opened a bit softer on the back of tactical actions, in our opinion, ahead of more supply. However, market was traded higher as some players resumed that selling activity that had been done for the past few days. Volume was thin thus players started to expect that demand at auctions will be strong. Volume fell to IDR7.7 trillion and was centred on bonds maturing over 10 years (40% of flows).