FW: CIMB Daily Fixed Income Commentary - 21 Aug 2017 - Uncertainties over Trump's administration remains/ Regional bonds gained following dovish Fed minutes release

 

Market Roundup

• US Treasury yields remained under pressure but were able to inch higher across the curve ahead of weekend. The yield upticks were partially due to rise in crude oil prices, as Brent crude climbed from around $51/bbl to $52.72/bbl. Aside, players are eyeing on Trump's administration, as news reported that his chief strategist Steve Bannon left White House on Friday. He was quoted stating "no administration in history has been so divided among itself about the direction about where it should go".
• Malaysia: Ringgit govvies moved in narrow ranges on Friday. MYR bond market appeared to be directionless despite the positive release of 2Q2017 GDP report (+5.8% vs consensus +5.4% and 1Q2017 +5.6% yoy). We now await announcement details for the 7-year GII (GII Aug'24) reopening auction with an expected RM3.5 billion size. As for highlight this week, players will be eyeing the global central bankers tone in Economic Policy Symposium scheduled on 24-26 Aug. Apart from that, Jul CPI is expected to register at +3.4%, lower than +3.6% yoy a month prior.
• Thailand: Bonds gained with yields dropped about 2-3bps along the mid and back of the curve as there were supporting flows from onshore player. Negative sentiment of Barcelona attack attributed gain in the bond and caused lower close of SET index at 1,566.53pt on Friday. Foreign investors further took profit in short-term bond at Bt1.27 billion while purchasing long-term bond at Bt2.11 billion last Friday and they shifted their interest to net-sell position of Thai bond at Bt10.11 billion for entire week.  
• Indonesia: IndoGB finally left consolidation mode, traded up in price on Friday as market speculating on potential easing by BI as early as next week (BI meeting on Tuesday, 22 Aug). Local buying flows appeared to be heavy, especially on 5- and 10-year benchmark bonds, followed by newly issued 21-year FR75. In other part of the curve, almost every tenor also looked biddish. Yield curve closed lower by 2-4 bps across. Total volume was steady amounting IDR19.7 trillion and dominated by bonds maturing in between 5 and 10 years (54%).
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