FW: CIMB Fixed Income Daily - 30 Jul 2018 - ID bonds steady on IDR strength; Auction boosts MY bonds

 

 

CIMB Fixed Income Daily - 30 Jul 2018 - ID bonds steady on IDR strength; Auction boosts MY bonds

 

US Treasuries posted gains despite release of upbeat US 2Q2018 GDP data as we head towards upcoming week of central bank policy decisions. These include FOMC on 2 Aug, BoJ (30 Jul), and BoE (also 2 Aug). US 2Q2018 GDP was at annualized +4.1% qoq though lower against +4.2% consensus, whilst the prior quarter’s was upward revised to +2.2% from +2.0% previous estimate. 

 

In Indonesia, IndoGBs were slightly weaker in tight range in the whole morning session before turning around after the break on the back of strengthening of IDR against USD. USD/IDR fell below 14400 before heading towards 14415-25. Bonds biddish on short dated bonds, but better bids were seen on longer tenors. Overall yield curve fell 3-5bps by the close.

 

Malaysia’s government bonds posted gains with after upbeat RM3.0b auction of 7y MGS (MGS 03/25) at 3.30x bid-cover and 3.984% average yield. Post-auction the 7y MGS ended at 3.97% for the day. Ringgit bonds had recently been boosted after Bank Negara Malaysia held the Overnight Policy Rate (OPR) at 3.25% as mostly expected by the market. Indeed, as some in the market had also anticipated, the central bank took a turn in its stance as it sounded more on the dovish side at its latest policy rate meeting. Even as policymakers sounded positive on domestic growth, it cautioned of downside risk from the external environment. Policymakers also warned that inflation may trek lower this year especially as impact from ‘recent policy measures’ take influence – by which we infer to be the cut in the GST and sustained petrol subsidies for consumers.

 

CIMB Treasury & Markets Research-Fixed Income
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