FW: Fixed Income Daily Pulse - 27 February 2018

 

 

Good Evening,
Today’s trade recap by our trading desk:-
·         Focus in the local bond space today falls on 10Y MGS 11/27 re-opening auction which saw RM3.5bio issued with an additional RM0.5bio privately placed. The auction was well received with a BTC of 2.066x at a high of 4.064%, low of 4.036%, averaging at 4.055%. Post auction, the stock traded firmer to a low of 4.024%, 3.1bps lower than tender average. That aside, trading activities in the local bond market improved slightly today with prices firmer on the belly of the curve in both MGS and GII space. Yields ended the day largely unchanged, apart from the 10Y which eased 2bps. On the data front, DOSM will be releasing Malaysia’s January CPI today with consensus of 2.8%y/y (Prev: 3.5%).
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 3.385 - 130 5-yr 3.615 - 161 7-yr 3.970 - 29 10-yr 4.035 -2.0 1,101 15-yr 4.470 - 94 20-yr 4.635 - 18 30-yr 4.865 - 15 Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.770 0.0 3-yr 3.841 0.4 5-yr 3.925 -0.5 7-yr 4.050 0.0 10-yr 4.170 0.0 Source: Bloomberg, AmBank

 

Best regards,

Fixed Income Research & Strategy

AmBank Research, AmBank (M) Berhad

+603 2036 2255 (DL) +03 2031 7218 (Fax)

Level 15, Bangunan AmBank Group, 55 Jalan Raja Chulan, 50200 Kuala Lumpur

 

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FW: 20180228 AmBank FX Daily Outlook (Amended)

 

 

Highlights of today’s AmBank FX Daily Outlook as follows:-

v  Dollar surged on Powell’s optimism v  MYR to fluctuate in the range of 3.9060 – 3.9265 against US dollar v  Key Watch: (i) Q4 US GDP Growth Rate 2nd estimate; (ii) Jan US Pending Home Sales; (iii) Feb EU CPI; (iv) Feb Germany Unemployment Claims Rate; (v) Jan Japan Industrial Production Prel.; (vi) Jan Malaysia CPI; (vii) Jan Malaysia PPI

 

Best regards,

FX Research & Strategy

AmBank Research, AmBank (M) Berhad

+603 2036 2255 (DL) +03 2031 7218 (Fax)

Level 15, Bangunan AmBank Group, 55 Jalan Raja Chulan, 50200 Kuala Lumpur

 

 

 

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FW: CIMB Fixed Income Daily - 28 Feb 2018 - Markets raise fourth hike expectations

 

 

Treasuries weaker. Details of Fed chief Powell's testimony to congress was released, where he pointed to continued economic growth and labor market ahead of Trump's tax plan execution. Powell warned financial market volatility will not deter the Fed from raising rates, though he still signaled the intended gradual pace of tightening. Fed fund futures pricing for a fourth rate hike rose – probability for a hike at the December FOMC rose from 22.0% to 25.2%.

Malaysian bond market was mixed ahead of Powell's speech. Sentiment was aided by overnight UST gains, as expectations were that Powell would not sound overtly hawkish seeing that a rate hike at next month's FOMC are mostly priced in by global bond markets. But focus was on RM3.5b reopening auction of the 10y MGS (plus RM500m private placement). Demand was decent at 2.066x bid-cover and average yield of 4.055% (high-low at 4.064-4.036%). WI levels had shown improvements from the day before, from around 4.08/05 heard early Monday. Sustained demand post-auction saw the 10y MGS at 4.03% by the close.

In Bangkok, yields inched moderately lower about 1bp across all tenors as players waited for Fed chairman's semi-annual monetary policy report to the House Financial Services Committee. Meanwhile, foreign investors were net buyers of Thai bonds despite the incoming congressional testimony. Bids on LB22DA prevented a rise above 1.825% and anticipated demand for the 5y benchmark including from inter banks and local funds should absorb LB22DA smoothly with less long-tail risk.

IndoGBs was stable ahead of Tuesday's auction though flows were pretty low. Incoming bids in the auction reached above IDR40t although this was the lowest incoming bids so far this year. However, post-auction bonds weakened as the government decided to upsize the issuance to IDR23.1t  from IDR17t target, and in the process issued 5y papers at long tail (cut-off at 5.90%, bid-to-cover ratio only 1.13x). The curve bear-flattened amid the auction with the 5y bond up 14bps, while the 10y/15y/20y rose +8/+3/+1bps. Volume eased to IDR22t while trade concentration shifted to the belly of the curve.

Asian dollar credits moved steady despite waiting for Powell's testimony, but boosted by overnight UST gains. The iTraxx Asia ex-Japan IG index narrowed by about 1bp Tuesday.


CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
www.cimb.com
Find us on Bloomberg at CIMR <Go>



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FW: FI Research -Re-opening of 10-year MGS

 

 

Dear Readers,   Highlights of the report as follow:-

·         The re-opening of the 10-year MGS 11/27 with a size of RM3.5bil, with an additional RM0.5bil privately placed, recorded a decent bid-to-cover (BTC) ratio of 2.066 times. This BTC ratio was highest since the 10-year MGS re-opening on 28th July 2017 of 1.683%. ·         Overall, the spread has narrowed especially following a sharp rise in UST yield which hit a new four-year high of 2.950% due to expected inflation concerns, intensified further after FOMC meeting minutes stirred discussions about possibilities of more rate hikes in 2018. The UST yield eased off lower more recently after some dovish comments made by US Fed members. ·         The next tender to watch is the re-opening of the 30-year MGII in March 2018. This is also the third MGII re-opening in 2018. The last issuance of such papers was in July 2017 which reported a 1.915 times BTC ratio.

 

 

Best regards,

Fixed Income Research & Strategy

AmBank Research, AmBank (M) Berhad

+603 2036 2292 (DL) +03 2031 7218 (Fax)

Level 15, Bangunan AmBank Group, 55 Jalan Raja Chulan, 50200 Kuala Lumpur

 

 

 

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FW: [Maybank] DXY – Running into a Wall of Resistance

 

 

 

DXY – Running into a Wall of Resistance FX Tech Flash by Saktiandi Supaat FX Research Key data/event focus in US this week on Powell's testimony (on Tue and Thu) as well as PCE core data for Jan (on Thu). Price action suggests that DXY appeared to have ran into a wall of resistance around 90 – 90.50 levels. We believe USD weakness could resume as long as the area of resistance holds. Failing which, we caution that a break beyond this resistance could see DXY head higher towards 91.2 levels ... Saktiandi Supaat     (65) 6320 1379     saktiandi@maybank.com.sg Christopher Wong     (65) 6320 1347     wongkl@maybank.com.sg Disclaimer This message is intended only for the use of the person to whom it is expressly addressed and may contain information that is confidential and legally privileged. If you are not the intended recipient, you are hereby notified that any use, reliance on, reference to, review, disclosure or copying of the message and the information it contains for any purpose is prohibited. If you have received this message in error, please notify the sender by return e-mail immediately and delete all its contents. If you wish to read Disclaimer in details, please click HERE. To unsubscribe or change preference settings, please click here to contact your representative.

FW: Auction Results: MGS 11/27 Reopening

 

 

Auction Results: MGS 11/27 Reopening

·         Solid bids. The 10y MGS 11/27 reopening garnered a robust bid/cover of 2.066x on a slightly larger-than-expected total size of MYR4b (MYR3.5b auction + MYR0.5b private placement). Interest to participate in this auction came amid a rebound in sentiment this morning as the global bond selloff appeared to have stalled as higher yield levels start to attract some investors.

·         Average of successful yields came to 4.055% and the high cut off at 4.064%, a marginal tail compared to the pre-auction WI range of 4.06/05%. The lowest successful yield was 4.036%.

·         First auction in March will be a reopening of 30y GII 5/47 at an estimated size of MYR2b.

 

Bid to cover:            2.066

Highest yield:           4.064%

Average yield:         4.055%

Lowest yield:           4.036%

Cut off:                   90%

 

If you like our report, we welcome your support in The Asset Benchmark Review for Malaysian Ringgit Bond.

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Regards,

 

Winson Phoon, ACA

(65) 6231 5831

winsonphoon@maybank-ke.com.sg

 

Se Tho Mun Yi

(603) 2074 7606

munyi.st@maybank-ib.com

 

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FW: RHB FIC Credit Markets Update - 27/2/18

 

 

27 February 2018

Credit Markets Update

           

Focus On 10Y MGS 11/27 Re-Opening; Powell Testimony A Key Watch.

MYR Credit Market:

¨      MGS and MYR steady ahead of CPI. The yields on longer end of the curve were seen declining ahead of the release of Malaysia inflation data tomorrow while US Fed Chair Powell testimony to also be a key watch. The 7y MGS pared losses from the previous week as it moved away from the 4% mark, rallying to 3.97% (-3.2bps) while the 10y MGS saw yields drag lower to 4.05% (-2.9bps). The 3y MGS yields, on the other hand, ticked a tad higher to close at 3.39% (+0.7bps). The MYR performed well against other EM Asia peers, trading higher against the greenback at 3.9030 (+0.4%).

¨      Govvies trading activities remained slow with volume of MYR1.3bn recorded. Most actively traded for the day was the benchmark 10y MGS 11/27 with amount of MYR208m dealt at 4.45% (-2.9bps). The longer-dated benchmark 15y MGS 04/33 attracted decent demand which saw MYR184m change hands, rallying to 4.46% (-2.4bps). Other notable trade was the off-benchmark security MGS 08/23 at MYR114m, closing the day at 3.81% (-2.5bps).  The benchmark 5y GII 04/22 remained active with MYR111m of trades as it again traded unchanged at 3.89%.

¨      Secondary flows saw trade volume for corporate bonds/sukuks continued to edge up with c.MYR507m of trades recorded. Top traded for the day was SEB 12/32 and 6/18 with combined transactions of MYR210m, last traded unchanged at 5.25% for the longer tenure security while the latter rallied -3.8bps to settle at 4.00%. PLUS BERHAD 1/31 and 1/33 saw MYR55m change hands with both yields ending the day slightly lower at 4.85% (-1bp) and 4.94% (-0.5bps) respectively. Other notable trades include MALAKOFF 12/20 and PUBLIC sub notes 10/23 with amounts of MYR35m and MYR30m each. The respective yields rallied to 4.45% (-1bp) and 4.30% (-6.2bps).

APAC USD Credit Market:

¨      US Treasuries yields ticked lower; Focus on Fed Powell testimony. The USTs gained slightly as market participants await for Fed Chair Powell to deliver his semi-annual monetary policy testimony before Congress starting later today. The lower-than-expected new home sales for Jan 18 also supported the USTs, declining to 593k (consensus: 647k) from revised figure of 643k recorded the previous month. The 2y and 10y USTs dropped further to 2.22% (-1.61bps) and 2.86% (-0.4bps) respectively. The USD was largely unchanged at 89.9 (-0.03%). Meanwhile, Fed Governor Quarles spoke yesterday as he resonated a more upbeat view on the current economic conditions in the US while he continued to support gradual rate hike being ‘appropriate’, attributing to healthy labour market and stabilising inflation level to around target level of 2%.

¨       The iTraxx AxJ IG credit spreads rallied to 68.2bps (-2.1bps). Over in CDS space, most corporates recorded compressed spreads overnight. Leading the rally was State Bank of India/London which saw CDs levels fall nearly -4.4bps, trailed by Singapore Telecommunications Ltd. with around -4bps spreads reduction. Seeing a similar decline rate of close to -2.6bps was Export-Import Bank of China and Reliance Industries Ltd. Other notable entities include Telekom Malaysia Bhd, Petroliam Nasional Bhd and ICICI Bank Ltd. where CDS levels dropped between -2bps and -2.4bps. Over in sovereign space, Indonesia rallied around -1.8bps, followed by China close to -1.5bps.

 

 

FW: [Maybank] AXJs In Consolidative Mode

 

 

AXJs In Consolidative Mode Global Markets Daily by Saktiandi Supaat FX Research Asian equities are taking their cues from global markets and are in a sea of green this morning as risk appetite improves. China's imposition of dumping duties on a chemical from Japan, Singapore and Thailand as well as the possibility that Trump could name Peter Navarro (a trade protectionism advocate) as Assistant to the President though could trigger trade wars and weigh on the AXJs. For now though, AXJs should remain in consolidation ahead of Fed Chair Powell's testimony ... Saktiandi Supaat     (65) 6320 1379     saktiandi@maybank.com.sg Leslie Tang     (65) 6320 1378     leslietang@maybank.com.sg Disclaimer This message is intended only for the use of the person to whom it is expressly addressed and may contain information that is confidential and legally privileged. If you are not the intended recipient, you are hereby notified that any use, reliance on, reference to, review, disclosure or copying of the message and the information it contains for any purpose is prohibited. If you have received this message in error, please notify the sender by return e-mail immediately and delete all its contents. If you wish to read Disclaimer in details, please click HERE. To unsubscribe or change preference settings, please click here to contact your representative.

FW: RHB FIC Rates & FX Market Update - 27/2/18

 

 

27 February 2018

 

 

Rates & FX Market Update

 

 

Strong Demand Seen for 30y SGS Reopening

 

Highlights

 

¨   Global Markets: Given the recent bouts of market volatility triggered by upside inflation surprises in the US consequently fuelling fears of higher interest rates, market participants now await Jerome Powell first key appearance as he testifies before the Congress assessing the economy and monetary policy. We will closely monitor any comments on inflation developments and objective. We remain neutral UST for now. On a tactical horizon for the 10y UST, we watch 2.83% (21-day moving average) as a downside confirmation to play a retracement to 2.70%. The 10y Atlantic spread (UST vs. Bund) also offers tactical opportunities for UST outperformance against Bund as the spread could tighten towards 200bps. In Europe, Mario Draghi’s comments did not bring any surprise reaffirming the Euro Area’s robust growth while stating that currency volatility needs to be closely monitored. The ECB is expected to tweak its forward guidance in 1H18 and expectations of monetary policy normalisation are one factor underscoring our mildly bullish EUR view.

¨   AxJ Markets: Over in Singapore, Industrial Production climbed 17.9% y-o-y in January, outstripping consensus expectations of 7.5%, and a reversal from December’s negative surprise. Also, the March 46 SGS reopening overnight drew a BTC of 2.21x, the highest for the tenor since 2012, with previous duration concerns in the markets appearing overblown; 2y and 10y SGS yields dipped c.2bps overnight. We retain our neutral SGS stance, with US-SG spreads likely to come into focus ahead of MAS April’s review.

¨   USDMYR remained near the 3.90 level amid a quiet Malaysian session overnight, with investors awaiting the January CPI numbers. We initiated a long AUDMYR trade, eyeing a potential AUD rebound as various AUD crosses are on support (AUDUSD, AUDNZD, AUDSGD) while expecting the MYR to remain fairly stable, given a high likelihood for BNM to stand pat over the coming months to assess the appropriate monetary accommodation. We expect the trade to play out over the coming weeks, with the trade’s negative carry likely to be negligible.

 

 

 

 

FW: CIMB Fixed Income Daily - 27 Feb 2018 - Bonds steady before Fed chief Powell’s testimony

 

 

US Treasuries posted small gains as markets await Fed chief's testimony to Congress. Meantime, there was some support after new home sales surprised on the downside (-7.8% mom in January versus +3.5% consensus). Data on tap include 4Q17 GDP and PCE, and ISM manufacturing. There is support for the market down to 2.80%, whilst downside there's signal for resistance around 3.03%. We're also eyeing a flattish yield curve, expecting 2x10 spread averaging 65bps throughout the week.

MYR sovereign bonds mildly strengthened with activities focused on the bellies to long end of the curve. Flows remained muted as players wait for the CPI print, where consensus is eyeing for +2.9% for the January. On top of that, the improved sentiment (following UST recovery) sent the 10y MGS WI lower to 4.055/05% from 4.08/07% last Friday.

Thai govvies ield declined 1-2bps on the intermediates and long-ends as UST curve flattened. Flatter THB curve was supported by foreign purchases of long-term bonds and we view the current bond bidding environment is positive for LB22DA auction on Wednesday. Later this week, CPI is expected to remain slow in February (market estimates moderating headline CPI at 0.70% and core CPI at 0.60% yoy in February).

IndoGBs were traded firmer Monday from the opening, with buyers eager to bid in selected series especially 10y FR64, bringing the 10y yield down 5bps. However, longer tenors rose as much as 4bps (on 20y benchmark). Volume was thin aside from those buying actions. There will be a bond auction to be conducted today, where MoF will look to issue IDR17t on 5y, 15y, 20y benchmark bonds and 3m & 12m SPN bills. Expect demand to be concentrated more on shorter dated bonds. Volume leapt to IDR25.2t while trade concentration stayed at the tail end of the curve.

Asian dollar credits extended gains, tracking the recovery in UST late last week. Primary space saw active flows on Monday. Central China Real Estate's 3y bond was heard pricing at 6.50-6.625%. Apart from that, there were also multi-tranches issuance from Mitsubishi UFJ Financial Group and ICBC Dubai.

CIMB Treasury & Markets Research-Fixed Income
Tel: +603 2261 8557 | Fax: +603 2261 8705
www.cimb.com
Find us on Bloomberg at CIMR <Go>

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