US Treasuries. UST mildly weakened after Yellen's latest speech, where she warned the Fed should guard against 'moving too gradually' in tightening. But she also said the Fed may have overstated inflationary pressures in the past. Aside, Treasury sold $26 billion of 2y notes, at strong 2.88x bid cover and 1.462% high yield.
Malaysia. Malaysian govvies closed little changed on Tuesday, consolidating after the gains a day prior driven by geopolitical tensions. Notably, there were selling pressure on GII Nov'17 and MGS Oct'17, in conjunction with weaker MYR on Tuesday. Bank Negara announced 15-year GII reopening auction details, where RM3 billion for public tender and another RM1 billion for private placement. WI was heard quoted at 4.55%.
Thailand. Bond curve steepened with higher shift about 2bps on the front-ends before the MPC rate decision on Wednesday. Foreign investors were net seller of Thai bond at Bt426. USD/THB tested a high at 33.20 amid mild foreign selloff in Thai amid escalating Korean tensions. Sustained levels above 33.20 would be negative for front-end govvies, in our opinion.
Indonesia. IndoGB yield curve rose as market entered risk-off mode due to North Korea news again. Bids were provided by local players albeit not aggressive. Although secondary market prices was lower, demand in the IDR sharia auction on Tuesday was still strong, as government received IDR26.4 trillion incoming bids and upsized the issuance by IDR2 trillion to IDR7 trillion.
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