US Treasuries. UST continued to weaken as markets counted on Trump's tax plan and recent hawkish remarks from Jane Yellen. The Aug core PCE dipped to +1.3% from +1.4% a month prior, marking the lowest level since Nov 2015, but markets reacted little to it.
Malaysia. Sovereign bonds posted mild gains alongside slightly firmer MYR. Flows were supported by month-end demand, while sentiment was aided by consolidation in UST yields after recent upticks. As we head into Oct 2017, a major event to look towards is the government's 2018 Budget announcement. For this year at least, we are positive on the fiscal outlook, as our calculations signal to us target of 3% of GDP fiscal deficit this year is achievable or could even be surpassed, backed by recent positive growth data and crude price.
Thailand. On Friday players looked to buy 5-10y papers but foreign players continued net selling of front-ends causing net-sell position at Bt3.42billion. Firm current account at $4.66 billion in August might mitigate loss in the Baht and short-end govvies.
Indonesia. IndoGB opened quite biddish on Friday, continuing previous day's rebound. Net buying flows were seen especially on benchmark series from belly to long end, and followed by 5y and shorter dated bonds afterwards. Bids remain strong until near closing hour, where some profit taking was seen, with support bids still appearing until market close. Market volume fell to IDR17.6 trillion and was dominated by bonds maturing in over 10 years (64%).
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