US Treasuries. UST were weighed by higher-than-expected core inflation print ahead of weekend, with 2T yield peaking at 2.00% for the first time since 2008. The Dec core inflation accelerated at faster pace of +0.3% mom, from +0.1% mom in Nov, boosted by higher costs in rental accommodation and healthcare. UST then pared back its losses on dip buying late Friday. Players now see higher probability at 87.9% for Fed to raise rate in March FOMC, in contrast to 81.7% a week ago.
Malaysia. Malaysian sovereign bonds were traded firmer amid stronger MYR on Friday. In primary space, the central bank sold RM4b worth of 5y GII at an average yield of 3.823%, within a spread of 3.81-3.829%, lower than WI 3.83% traded a day before tender closed. Demand was good with a btc of 2.58x. Post auction it was traded in between 3.79-3.83% before eventually settled at 3.81%.
Thailand. Positive momentum in Thai govvies halted on Friday as profit taking flows emerged, pushing yields a tad higher by around 1bp at the mid and long ends. Foreign demand for long tenure papers was solid, with bidding yield of LB26DA capped below 2.30%, while LB22DA was higher but was marginally below 1.80%.
Indonesia. IndoGB posted gains on Friday as USD/IDR broke below 13400 and buying inflows were seen especially on longer end of the curve – 15 to 20y tenures. Despite profit taking at the tail end of trading. Bond markets remain firm and well supported. Daily volume was steady amounting to IDR19.3t with trades concentrated in the longer end of the curve.
Asian Dollar Credits. Secondary trading in USD credit market continued in a positive tone ahead of weekend. Highlight was on Tencent Holdings, which priced its 5, 10 and 20y fixed rate bonds at 65, 105 and 105bps above Treasuries, while the 5y floating rate notes were priced at 3mL+60.5bps. Aside, Yingde Gases's 5NC3 was priced at 6.30% and Petron Corp perp NC5 was launched at 4.60%. Bloomberg news reported that India Exim is looking for USD bond issuance.
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CIMB Treasury & Markets Research-Fixed Income
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