Peso GS Weekly: Strong demand fuels bond market rally 

What happened last week

At the start of the week, improved risk sentiment—following positive trade developments between the US and China—drove better buying from both dealers and end-users, pulling yields lower by as much as 4.5 basis points (bps) and flattening the curve. Demand was concentrated in the belly of the curve, particularly in 8–10Y bonds, with 10-72 (8.8Y) outperforming at 6.345%. Despite stronger buying, overall volume remained light at under PHP 14 billion, as investors awaited the pricing of the 10-year jumbo issuance.

The highly anticipated 10-year FXTN was priced at 6.375%, aligning with market expectations. The auction attracted PHP 197.3 billion in tenders, with PHP 135 billion awarded. Strong demand continued post-auction, especially from those priced out, leading to a