Market Roundup
- US Treasuries were supported due to some safe haven flows on the back of US-North Korea tensions but gains along the 10T were pared as the $23 billion auction tailed about 1-2bps.
- We heard China's CPI up 1.4% yoy in Jul versus 1.5% consensus whilst PPI was up 5.5% also lower versus 5.6% consensus. The lower but decent China inflation numbers meant CNY moving well within current 6.6750-6.7000 range.
- Malaysia: MYR government bonds showed moderate gains across the term structure, with hints of duration extension from players. Meantime, swap rates were held in range amid geopolitical concerns limiting risk-on sentiment in EM markets. Resistance for the 10-year MGS remains 4.05% in our view. We still await details of new 3.5-year MGS auction (MGS Feb'21).
- Thailand: Thai bonds bull-flattened as there was firm demand for the Bt10 billion 29-year LB466A auction which drew attention at 3.42 bid to cover, 10% over-allotment, and average yield 3.21%. Auction average was 10bps lower than pre-auction level and 15bps lower since the bond switching exercise on Jun 23. Long-ends declined 5-6bps while shorter tenors edged moderately lower 1-2bps. Escalating geopolitical tensions caused foreign sell-off in short-term bonds resulting in net-sell position in Thai bond at Bt3.36 billion. Meanwhile, foreign demand for long-term bond remains intact with net-buy position at Bt 1.01 billion.
- Indonesia: IndoGBs were in range Wednesday, but sentiment was positive for the whole day. Bidders were especially keen for newly issued 21-year FR75, and pushed that specific series to 7.46%, while 20 year maturities closed near 7.55%. Other notable activities were also seen in 5- up to 15 year tenors, although market felt more balanced on bid-offer. Total volume decreased to IDR12.0 trillion and dominated by bonds maturing 1-5 years (38%) and bonds maturing in over 10 years (40%).
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