UST weakened further on upbeat economic outlook. Losses were detected early, upon comments from an ECB council member who said the central bank ought to end its asset purchases program in view of upbeat growth outlook. The 10T is at its highest since April 2014.
MYR bonds posted mild losses amid reversal in USD/MYR late Monday. The currency pair started off the day below 3.87 but eventually edged higher and settled above 3.88 amid broadly firmer USD, possibly driven by repositioning ahead of FOMC meeting this week. With UST yields remaining on their upward momentum and USD paring losses, we expect MYR bonds to see mild profit taking pressure before FOMC meeting.
Thai bonds were weighed by weaker THB. USD/THB was traded higher Monday from firm bidding to cushion the recent decline. Moreover, the rise in USD/THB was in line with USD versus Asian fx as investors may take profit before FOMC. USD/THB technical resistance is at 31.50 and key support at 31.20.
IndoGBs weakened further amid onshore net selling pressure. We think pressure emanated mostly from a cautious mood ahead of this week's FOMC. We also have bond auctions coming today which swayed onshore players to the sidelines.
Secondary trading in USD credits was dampened by weakened UST late last week. As for primary deals, China Cinda Asset Management and PT Sulfindo Adiusaha are among the latest pipelines reported. Aside, Yango Group's 3y bond was guided at 8.875%, and Poly Real Estate's 5y paper was indicated at T+185bps. Expect sentiment to remain guarded awaiting Fed's decision this week.
Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
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