FW: CIMB Fixed Income Weekly - 22 Jan 2018 - Weaker bias ahead of Malaysian policy meeting and CPI

 

 

• Malaysia
  o        Malaysian bonds likely to see consolidation with weakening bias this week, as players would prefer to stay at the sidelines or trim positions ahead of MPC and CPI. Assuming a rate hike, we expect 3y MGS in 3.40-3.45% range; otherwise if no hike, the 3y proxy should be limited to 3.35% upside.
• Indonesia
  o        We see support for 10y bonds around 6.00% this week with lack of fresh market drivers and UST remaining weak above 2.60%.
• Thailand
  o        Limited downside risk for 10y benchmark LB26DA auction on 24 Jan; even sustainable with 10y UST above 2.60%. Unlike 20y LB366A which has concentrated demand around local lifers and pension funds, LB26DA is expected to receive strong bids from a bigger universe of investors including banks and asset managers. In addition supply story looks to support 10y bond as gross issuance of 10y bond will decrease by 4% in FY2018.

Best Regards,
CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557
www.cimb.com
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