MARKET TALK: Malaysian Govt Bonds Steady; Tues Auction Eyed -Trader

Malaysian government bonds are nearly unchanged in low volume as investors proceed cautiously ahead of the weekend while waiting for an auction due Tuesday for more cues. Worries over Europe's debt crisis continue to linger and the market is still cautious whether Greece will be able to implement its austerity measures, says a local trader. "This discourages investors from taking excessive risk in emerging markets and many are in the market hunting for attractive yields," says the trader. Malaysia's central bank plans a MYR3.50 billion August 2017 Islamic bond auction on Tuesday, which will likely attract a bid-to-cover ratio of 2.5-3.0, he adds. The yield on September 2016 MGS is down 1 bp at 3.19% while September 2018 MGS yield is flat at 3.36%.