Risk-off sentiment was again driven by the intensification of trade tensions between China and US after the Trump administration proposed to increase the tariff to be imposed on US$200 billion worth of Chinese goods to 25 per cent from 10 per cent on Tuesday.
Following the news released, stock markets across the globe posted losses while safe-haven assets saw gains.
On Wednesday, the Fed held the interest rates unchanged at 1.75 to two per cent range as expected, but its view on the US economy was seemingly lifted compared to the previous Federal Open Market Committee (FOMC) meeting in June as economic activity has been rising at a strong rate.
The Fed also hinted a hike in September would take place on the back of strong economic data and tightness in labour market.
The 10-year US Treasury breached the 3.00% mark post FOMC statement release.
On the other hand, another highly anticipated meeting this week was the Bank of Japan (BoOJ) meeting, which beat the market’s expectation by keeping the rates unchanged while maintaining their current easing programs.
The policymakers stated to allow the 10-year Japanese Government Bonds yields to deviate within the range of zero to 0.2 percent.
On top of that, the BoJ has lowered inflation forecasts.
The Thomson Reuters BPAM All Bond Index saw an increase of 0.289 per cent to 159.5 points from 159.041 points last Friday amid strong demand for longer tenure bonds, partly contributed by MGS segment, in which the yields shed one to seven bps from seven-year curve point onwards.
However, the Ringgit weakened against the greenback to close at 4.0825 from 4.0660 last week.
Top 10 most active bonds:
The top 10 most active bonds increased to RM10.4 billion from RM 7.3 billion last week.
The 10-year benchmark of GII maturing on October 31, 2028 recorded the highest trade volume of RM2.8 billion.
Sovereign auction(s):
On August 2, 2018, the central bank has announced the auction details for the reopening of the RM2.5 billion 20-year benchmark GII maturing on August 4, 2037 with profit rate of 4.755 per cent. The tender will close on August 6, 2018.
New issuance(s):
On July 30, 2018, Sabah Development Bank Bhd issued a two-year Medium Term Notes (MTN) amounted to RM100 million with coupon rate of 4.850 per cent.
The MTN is rated AA1 with stable outlook by RAM Ratings.
On July 31, 2018, Affin Bank Bhd issued a perpetual non-callable five-year floating bond, of which the rate was determined based on a 2.02 per cent spread on the five-year MGS Index.
The RM500 million issuance is rated A3 with stable outlook by RAM Ratings.