US Treasuries. UST continued to see weakening bias alongside the rise in crude oil prices, but yields were eventually pared lower and settled little changed on Wednesday. Also, there was news reported that Chinese officials may slow down or halt UST purchases. The 10T tested intraday-high at 2.595%, near to the 2.628% registered in Mar 2017. On a separate note, Chicago Fed president Charles Evans prefers not to raise rate until mid of this year, while he is not concerned by the flattening yield curve.
Malaysia. Malaysian sovereign bonds were under pressure as USD broadly strengthened in the early session. However selling pressure in bond market eased with as USD/MYR pared lower from levels above 4.01. Meantime, the 5y GII reopening auction came at an issue size of RM4b. WI was heard quoted at 3.87/85%. At this juncture, bond market seemed to be supported by MYR strength, although UST yields continued to trend higher.
Thailand. Thai govvies curve flattened with outperformed intermediates due to high demand in LB22DA auction. The auction of 5y benchmark LB22DA saw solid demand with 4.4x btc and total accepted amount of Bt29.8b. The average yield recorded at 1.82%, 2bps tighter than pre-auction level, due to aggressive buying by local banks. Post auction, firm bidding of the bond continued in the secondary market and the yield slid to 1.81%. The auction of 50y LB676A received good demand as expected and average yield recorded at 3.3923%. Solid bond auction results confirm limited external risk driven by sell-off in UST and JGB.
Indonesia. IndoGB traded lower in price on Wednesday, in line with higher UST yields overnight by 7-8bps. Market opened with weaker tone, led by selling activities by offshore banks, while locals were seen supporting the bonds. As selling pressure eased, locals started to bid more aggressively and market able to rebound a bit, although 20y bucket was still unable to recover much. Market volume decreased to IDR22.8t and trades concentration shifted to the long end of the curve.
Asian Dollar Credits. Secondary trading saw mild selling pressure, reacting to the uptick in UST yields, alongside with emerging primary deals. Elsewhere, Zhongyuan Yuzi's 3y bond was guided at T+175bps, while BOSC's 3y paper was indicated at T+115bps. Aside, Lai Fung Holdings' 5y bond was reportedly pricing around 5.65%.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
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