US Treasuries. Treasuries posted mild weakening along shorter tenures upon release of latest TBAC report which recommended larger offerings of 2, 3, and 5y papers. Treasuries reacted little to the Fed decision to hold rates but with a December hike still in the offing. Alongside the TBAC report, the Treasury Department indicated it will sell $24b of 3T, $23 of 10T and $15 of the 30T in its quarterly refunding plan.
Malaysia. MGS yields edged higher across the curve following overnight UST losses. Focus remained on the external events, apart from domestic trade numbers slated for Friday. Economists are seeing exports and imports to grow at +20.0% each for the month of Sep, marginally slower than +21.5% and +22.6% yoy registered a month prior.
Thailand. Bond yields fluctuated in tight range as the market awaited the FOMC outcome. After the +0.86% headline inflation for October, local buying interest emerged and front-end bonds rallied with 1-month yield tumbling to 1.10%. Meanwhile, foreign investors took profit in Thai bonds before key global events and much of local rate movement has stemmed from the news flow of US tax reform and candidate for Fed's top job.
Indonesia. IndoGBs were traded in range most of Wednesday, with activities centered on 5 and 10y buckets (67%), although longer end bonds had their moments too, generating interests from bargain hunting interest. Lower-than-expected CPI data didn't move the market, as most players are still waiting for news on Fed and FOMC. Small selling actions were seen near closing hour and yields rose marginally. Market volume fell to IDR10.3t.
Asian USD credits. Asian USD credits were weighed by upticks in UST yields and recent heavy primary supplies. Sovereign names particularly China sovereign continued to widen after being priced tightly. Elsewhere, Bloomberg news reported that China Development Bank is looking to issue USD and EUR senior bonds. Meantime, Telstra Corp is also meeting potential investors beginning 6 Nov for USD issuance.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
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