US Treasuries. UST moved little as players await more catalysts including Fed-speak and tax bill vote at the Senate this week. New home sales rose to 685k in Oct, from 645k in Sep, driving yields to spike before eventually pared lower late Monday. In a prepared testimony, Powell said the Fed will continue eyeing "a sustainable strong job market with inflation moving gradually up toward its target, while expecting interest rates to rise somewhat further and balance sheet size to gradually shrink." Aside, Dallas Fed president Kaplan believes that it will be appropriate to raise rate in the near future.
Malaysia. Secondary trading was muted with flows concentrated on selective off-the-run papers. There was mild net selling pressure, possibly due to players making space for upcoming 5y GII reopening, while awaiting fresh catalysts particularly from Fed-speak and vote on the US tax reform. WI for the 5y GII was marginally narrower at 3.84/81%, in contrast to 3.85/81% last Friday. This week, we expect 5x5 to gap tighter to around 15bps after last week's surge, especially after Oct CPI came out lower than expected (+3.7% against 4.1% consensus).
Thailand. Thai bond market was quiet with outright trading down to Bt40.76b on Monday and yields were seen in small fluctuation within less than 1bp. The market waited for trading cues depending on external UST movement and local data namely current account for Oct on Thursday and Thai CPI on Friday.
Indonesia. IndoGBs were traded sideways in morning session on volume. After London opening, market was traded down as small net selling action was seen especially on 10y FR59 benchmark bond. However the downside was limited as market was well supported, with bidders appearing at current level until market close. Volume increased to IDR10.6t and was dominated by bonds maturing in over 10y (48% of volume).
Asian Dollar Credits. USD credit market remained under pressure amid persistent primary offerings. Also, sentiment was guarded with several Fed members giving speeches. Tewoo priced its 3y bond at T+130bps, tighter than T+155bps guided earlier.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
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