US Treasuries. UST was traded little changed despite Senate Budget Committee approving the tax bill for full chamber vote later this week. The $28b 7T auction saw weak demand with a 2.36x cover against average 2.55x for the past 12 similar auctions. High yield was 2.23% with indirect bidders taking 16.4% of the sales. Apart from signaling for a Dec hike, Powell said that the Fed is looking at an economy with below 4% unemployment as more people are coming back to work.
Malaysia. MYR bonds were dealt weaker, despite USD/MYR dipped lower to 4.1025 late Monday. Demand was relatively poor for the 5y GII reopening where btc was 1.715x for the RM3.0b issue. Also, average yield was 3.872%, within a spread of 3.84-3.90%, higher than WI 3.84/81% quoted a day prior. Post auction it was traded wider and touched 3.89-3.90% before settled at 3.87%.
Thailand. Bond switching through electronic platform or E-Switching dominated flows Wednesday. Source bond LB196A was under selling pressure after the end of switching program lifting front-end (1-2y) about 1bp as players trimmed position in short-term bonds. Longer term destination bond remained a target buy for local fund and insurance company and yield edged lower about 1-3bps for the segment of 5-year term and longer. Market development signals players avoided holding short-term govvies before Dec FOMC meeting while demand for short-term offshore debt remained strong for seeking higher return on investment causing lower USD/THB forward point from the need of USD funding.
Indonesia. Similar to Monday, IndoGB market was quiet in morning session, but picked up the pace after the break, with bidders looked keen to buy bonds in 7-10y space, as well as 15y benchmark bond. Market was biddish until closed. Market volume decreased to IDR8.0t on Tuesday and dominated by bonds maturing in over 10 years (51% of volume).
Asian Dollar Credits. USD credits closed marginally firmer, taking a breather with UST moving sideways. In primary space, Fosun International's 3y bond was heard pricing around 5.375%, while Yiwu State-Owned Capital's 3y paper was guided at T+225bps.
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CIMB Treasury & Markets Research-Fixed Income
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