Skip to content
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Menu
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • Sign In
  • Subscribe
  • Group

    Group

    The MARC Group of Companies comprises MARC Ratings, MARC Solutions, MARC Data and MARC Learning.

    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning

    MARC Ratings

    • Rating Guide
    • Rating Process
    • Rating Symbols & Definitions
    • Rating Methodologies
    • Regulatory
    • Lead Managers

    MARC Solutions

    MARC Data

    MARC Learning

    • Careers
    • Careers
  • Services

    Services

    MARC's subsidiaries each provide distinct product offerings and services.

    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights

    Insights

    Find the vital information you need and stay up to date with the latest news from MARC.

    • Rating Announcements
    • Research & Analysis
    • Views
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Latest@MARC
    • MARC in the Media
    • Latest@MARC
  • Events & CSR

    Events & CSR

    MARC organises a diverse range of events throughout the year to engage with all stakeholders.

    • MARCares
    • Events
    • MARCares
    • Events
  • Contact Us

    Contact Us

    Let's get the conversation started - Get in touch with us!

    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
MARC Online
Subscribe
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Credit Ratings & Related Assessments
Sustainability- Related Assessments
Economic & Fixed-Income Analysis
Subscriptions
Sustainability- Related Advisory
Debt Advisory
Analytics Consulting Services
Data Analytics
Credit Reporting
Learning Programme

Credit Ratings & Related Assessments

Sustainability- Related Assessments

Economic & Fixed-Income Analysis

Subscriptions

Sustainability- Related Advisory

Corporate & Debt Restructuring Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning & Customised Programme

  • Insights
  • Latest@MARC
Corporate

Bond yields surged as global central banks seen unwinding stimulus at a quicker pace

View Reports

Contacts

Posted Date: December 2, 2021

Hawkish expectations were rife in October as global central banks are set to normalise their monetary policies soon. The US Federal Reserve had announced that it will begin tapering its asset purchases by USD15.0 billion from its USD120.0 billion monthly bond-buying programme. In the EU, the European Central Bank had hinted that the Pandemic Emergency Purchase Programme would end in March 2022. Meanwhile, the Bank of England (BoE) predicted that inflation would rise to around 5.0% y-o-y in 2Q2022.

The global central banks' increasing hawkish views have led to higher yields across global bond markets. This was further exacerbated by a heightened inflation outlook following the rise in crude oil prices, leading to investors pricing in more aggressive rate hikes by global central banks. The US inflation rate in October spiked to 6.2% y-o-y while the EU's inflation rate reached a 13-year high at 4.1% in the same period. The UK's inflation rate came in at 4.2% in October, above the BoE's 2.0% target. Meanwhile, Malaysia's October Consumer Price Index (CPI) rose 2.9% y-o-y (Sep: 2.2%) and is expected to continue rising on the back of the gradual economic reopening. All states in Malaysia have transitioned into Phase 3 or 4 under the National Recovery Plan.

As a result, Malaysian Government Securities' (MGS) yields rose on the back of the hawkish outlook. Investors also believed that Bank Negara Malaysia (BNM) would raise the Overnight Policy Rate (OPR) by 2022, mirroring the global hawkish view. In November, BNM left the OPR unchanged at 1.75% as widely expected during its final Monetary Policy Committee meeting for 2021.

MGS yields rose despite foreign investors raising their buying momentum in October, making local investors net sellers of MGS for the month. Foreign holdings of MGS surged by RM2.7 billion to RM192.0 billion (Sep: RM189.3 billion), equivalent to 40.1% of total outstanding. Foreign demand in October was supported by yield hunting activities and the stronger ringgit.

In addition to the hawkish outlook, MGS were also pressured by heightened supply concerns ahead of the tabling of Budget 2022. It is worth noting that Malaysia's development spending is mostly funded by debt.

By end-October, the MGS yield curve was seen to be flattening as yields at the short end till the belly of the curve rose higher compared to the yields at the longer end. MGS yields along the 2y10y curve surged by 15bps to 27bps while MGS yields along the 15y30y rose by 12bps to 17bps. Both the 3y and 10y MGS yields last settled at 2.69% (Sep: 2.47%) and 3.59% (Sep: 3.38%). The 20y/3y MGS yield spread narrowed to 154bps (Sep: 162bps). Meanwhile, trading activities were slightly lower in October with the total volume declining to RM38.9 billion (Sep: RM39.9 billion).

The full report can be accessed here.


Contacts:
Lyana Zainal Abidin, +603-2717 2912/ norlyana@marc.com.my;
Firdaos Rosli, +603-2717 2936/ firdaos@marc.com.my.

You May Also Like To Read

See All
Corporate

MARC Ratings publishes 2021 Lead Managers' League Tables

1 December, 2022

Ratings

Banking Sector Insights - Weathering the Headwinds

1 December, 2022

Corporate

MARC honours high achievers of its 2021 Lead Managers' League Tables

23 September, 2022

See All

Let’s get started.

Subscribe to our mailing list today

Subscribe Now
Group
  • About MARC
  • Leadership
  • Investor Relations
  • Notable Issuances
  • Careers
Regulatory
  • Rating Reviews Summary
  • List of Defaults
  • List of Credit Ratings Published
  • List of Entities on Rating Watch
Services
  • Credit Ratings & Related Assessments
  • Sustainability-Related Assessments
  • Economic & Fixed-Income Analysis
  • Sustainability-Related Advisory
  • Corporate & Debt Restructuring Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidaries
  • MARC Ratings
  • MARC Learning
  • MARC Data
  • MARC Solutions
Insights
  • Rating Announcements
  • Research & Analysis
  • Views
  • Latest@MARC
  • MARC in the Media
Events
  • Corporate Events
  • Corporate Social Responsibility (CSR)
  • Advertise with MARC
Contact Us
  • Contact Us
  • Service Level Feedback Form
  • Publication Feedback Form
  • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Terms & Conditions
Privacy Notice
Copyright Notice
Whistleblowing
PDPA Notice
© 2023 Malaysian Rating Corporation Berhad. All rights reserved.
Facebook Twitter Linkedin

Join MARC Mailing List

I would like to subscribe this mailing list. Please tick whichever is applicable

I agree/ do not agree (please tick whichever is applicable) to receive future events, conferences or marketing materials from MARC. *

Privacy Notice *

Declaration *