|
Good
evening!
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Today’s
trade recap by our trading desk:-
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
·
The week started
with a very weak auction for the new RM4.0bio 5Y MGS issuance which saw a BTC
of 1.420x only and averaging at 3.620%. This is probably due to the bank
holidays in both US and UK in which foreign participation was low during the
auction. Many traders also stayed on the sidelines after Yellen’s hawkish
comments last Friday, indicating that higher rates may be warranted over the
next few months. As a result, the market was also tilted bearish, seeing some
selling pressure on the belly of the curve in the afternoon, with particular
focus on the 5-10Y MGS benchmarks. MYR also closed weaker today by 350pips at
4.1150 level as yield curve gained 2-6bps across.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Malaysia
Government Bonds Benchmark Issues
Source:
BondStream, AmBank
|
Interest
Rate Swap Closing Rates
Source:
Bloomberg, AmBank
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
Local News:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
·
None.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Tuesday, May 31, 2016
Fixed Income Daily Pulse, 30 May 2016
Eurozone Economic Sentiment Firms As Consumers Brush Off Political Uncertainty
|
Economic Research
|
31
May 2016
|
|
Global News
|
|
|
Economic Highlights
|
|
|
Eurozone Economic Sentiment
Firms As Consumers Brush Off Political Uncertainty
Japan’s Retail Sales Stall as
Abe Mulls Delay to Tax Hike
Chinese Yuan
Weakens To 5-Year Low And Default Chain Reaction Threatens Products Worth
35% of GDP
Economist:
Peck Boon Soon | +603 9280
2163
Vincent Loo Yeong Hong | +603 9280
2172
Rizki Fajar | +6221 2970
7207
Zhang Fan| +8621 6288 9611
ext 105
|
|
|
|
|
|
To
access our recent reports please click on the links below:
|
|
Prospects of FFR Hike Over the Coming Months Drove Asian FX Underperformance Against USD
31 May 2016
Rates & FX Market Update
Prospects of FFR Hike Over the Coming
Months Drove Asian FX Underperformance Against USD
Highlights
¨ Global
Markets: With US financial markets closed in observance of Memorial Day
yesterday, major crosses remained subdued while Asian FX underperformed the USD
as Fed’s Yellen echoed the hawkish Fedspeak and reiterated the likelihood for
FOMC to raise rates in the coming months should economic conditions permit. We expect
USTs to continue trading on a soft note as US financial markets reopen, with
supportive PMI and labour data likely to continue to pressure yields on short
dated USTs higher; maintain mild overweight duration on USTs.
Meanwhile, short covering on JPY drove the USDJPY pair firmly above 110
overnight (+0.65%), as the strengthening USD amid increasing FFR hike prospects
alongside increasing pressure for BoJ to implement further monetary easing tug
both currencies in opposite directions. Yields on JGBs are likely to remain
subdued as BoJ continue to dominate the market, while we recommend for
investors to switch to a mildly bearish stance on JPY amid the uncertain
economic outlook entangled with prospects of a sales tax hike delay and
Japanese snap elections.
¨ AxJ
Markets: Despite upward revision in South Korean’s March IP, the
disappointing print in April continued to raise doubts on a steady economic
recovery as government officials remained hesitant on further fiscal stimulus.
We reiterate our view for another 25bps BoK rate cut which could come as
early as June’s meeting, preferring to hold a neutral duration stance on
KTBs alongside a mildly bearish view on KRW, with a YE16 forecast of 1,240 for
USDKRW. Elsewhere, Malaysia’s 1MDB coupon payment was made after missing 2
payments earlier, but failed to buoy strength on MGS or MYR as FOMC decision
remained in focus; expect the USDMYR pair to remain sensitive to gyrations
from the USD, where we maintain a neutral stance on MYR.
¨ Bearish pressure on CNY mounted
following hawkish Fedspeak over the past weeks, including Fed’s Yellen on
Friday, which cemented expectations for a 25bps FFR hike over the coming
months. While weaker PBoC yuan fixings are likely to guide the USDCNY pair
higher over the coming weeks, we continue to eye the PMI data due this week,
which could further dampen sentiment on the Chinese economy and spur further
outflows.
Weak Demand for MYR4.0bn 5.5y MGS 11/21; Three Indian Banks Downgraded by S&P
31 May 2016
Credit Markets Update
Weak Demand for MYR4.0bn 5.5y MGS 11/21;
Three Indian Banks Downgraded by S&P
¨ APAC USD Credit Market: Quiet session in credits as Asian
CDS tilted lower by 0.7bps to 140.3bps, while IG spreads and speculative bond
yields were unchanged at 210.2bps and 7.14% respectively. The US Treasury market was closed on Monday for the Memorial Day
Holiday, though investors can look forward to tonight’s release of the US Apr
PCE Core expected at 1.6%, alongside Apr personal income and spending prints
expected at 0.4% and 0.7% respectively. Elsewhere, S&P dropped Bank
of India and Syndicate Bank to non-investment grade
credits, slashing their ratings to BB+ from BBB-/stable; Indian Overseas Bank
was cut to BB/stable from BB+, with S&P citing weak asset quality and
high credit costs for the 3 banks mentioned above, amid tough operating
conditions in the Indian corporate sector.
¨ SGD Credit Market: GSH
Corp prints 3y; S&P withdraws Soilbuild rating. There was a 7-9bps
widening in the short-to-mid SOR curve, with the 2y and 5y closing at 1.78% and
2.15% respectively. Brent oil prices continued to hover steadily around the
USD49/bbl handle, with interest in HY names like BTHSP & GALVSP as well as
property papers such as CAPITA & CITSP. Meanwhile, Soilbuild Business REIT
(Baa3/Sta) requested the withdrawal of its BBB-/Sta rating by S&P, with
only its existing Moody’s rating remaining. In the primaries, GSH Corp Ltd
(NR), a property developer with interest in Singapore and Malaysia, is printing
a SGD3y at initial guidance of 5.25%.
¨ MYR Credit Market: The new 5.5y MGS 11/21 received the
weakest demand this year with BTC of 1.42x, averaging at 3.62%. Sentiment
was bearish driven by the weakening MYR to 4.1163/USD (+0.9%) following
Yellen’s hawkish remarks last Friday. MGS curve steepened with the 5y and 10y
increasing 2-3bps to 3.46% and 3.92%, while 3y settled flat at 3.24%. Moderate
flows of MYR400m were seen in the corporate market. Sime Darby Pc26 closed flat
at 5.35% on MYR106m trades; while PLUS 1/27 rose 6bps to 4.538%.
Subscribe to:
Posts (Atom)
