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Peso GS Weekly: Buy the short, pause on long
Activity in the local bond market is concentrated at the front-end of the curve, with minimal activity at the back-end.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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What happened last week
The local government securities (GS) market had a quiet start last week, with yields trading within recent ranges due to the absence of fresh catalysts. Short-dated bonds saw better demand, leading to a slight steepening of the yield curve, while medium- and long-dated bonds remained relatively flat.
Elsewhere, the Treasury bill (T-bill) auction was well received last Monday, with yields awarded up to 10 basis points (bps) lower than the previous auction. The Bureau of the Treasury (BTr) fully awarded PHP 30 billion for the reissuance of the 7-Year Fixed Rate Treasury Note (FXTN) 10-69. Due to its strong demand, the BTr opened the tap facility for an additional PHP 7 billion, which was quickly absorbed.
Midweek, the GS market saw mixed trading, with local yields tra
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