Market Roundup
US Treasuries. US Treasury yields further climbed, as market shrugged off weaker-than-expected economic data releases. The Aug retail sales surprisingly fell by 0.2%, below consensus +0.1% mom, while Aug IP contracted by 0.9%, versus +0.1% mom. Aside, players remained net sellers amid cautious trading heading into FOMC this week, with little flows for safe haven assets despite the London tube bombing on Friday.
Malaysia. MYR sovereign bonds closed on firmer footing, along with stronger MYR on Friday. Upcoming Aug CPI sees +3.1% yoy, but there were higher crude oil and fuel prices last month, which could propel the inflation to be higher than expected. Taking cue from FOMC and Malaysia's CPI, we are more positive for MGS with tenors up to 5 years
Thailand. Thai bonds traded in tight range and thin activities due to light macro and event on Friday. Offshore investors unloaded long-term bonds at Bt2.60 billion ahead of US FOMC meeting. They still bought short-end at Bt235 million due to good carry as funding cost or implied fixing rate was low. Therefore, the auction of 14-day CB bill amounting Bt20 billion on Fri drew solid demand at average yield of 1.0874%.
Indonesia. IndoGB found bottom on Friday. Market was well supported in early session although IDR weakened. Bonds were biddish due to excellent Aug trade surplus and market players started to chase bonds especially 10- to 20-year benchmark bonds. Upcoming bond auction should see demand with likely reinvestment of IndoGB coupon payments. Trades centered on bonds maturing between 1 and 5 years (35%) with lower daily volume IDR13.7 trillion.
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