MGS and GII yield movements were mixed this week, ranging between -12.7 bps to 2.3 bps overall. The 10Y MGS yield rose marginally by 0.3 bps to 4.059%, while the 3Y MGS yield plunged by 12.7 bps to 3.616%.
Local bonds remained mostly well bid this week despite a lack of domestic catalysts, likely steered by falling global bond yields. Meanwhile, according to Kenanga the foreign selling of domestic bonds eased in November (-RM1.0b; Oct: – RM6.3b) on the back of improved political stability and expectations of a less hawkish Fed.
The house further added that yields may trend rangebound next week, driven by potential volatility in US Treasuries amid the final US FOMC meeting (Dec 13 – 14) of the year. Foreign demand for Malaysian bonds may continue to improve in the near-term, buoyed by the new government and easing of political uncertainty. However, the local debt market may still record mild foreign outflows in 1Q23 as the US Fed continues to raise interest rates and global risk sentiment remains tepid.
