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Peso GS Weekly: Strong demand for 10-year bonds
Market participants’ focus on the newly issued 10-year FXTN 10-73 extends to neighboring securities.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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What happened last week
The local government securities (GS) market saw heavy activity centered on the newly issued 10-year benchmark, Fixed Rate Treasury Note (FXTN) 10-73, last week.
The bond opened slightly below its 6.375% coupon at 6.35%, but peaked at 6.38% due to selling interest. On Tuesday, declining global yields spurred strong buying interest in the GS market, particularly in the 10-year space. This led to the local yield curve flattening, as market players’ interest extended to nearby tenors such as FXTNs 10-69 and 10-72. At the Bureau of the Treasury auction, PHP 30 billion of FXTN 7-70 was awarded at an average of 5.943%, with accepted bids from 5.850% to 5.950%.
By Wednesday, local yields continued to flatten amid a rally in US Treasuries and a stronger peso. FXTN 10-73 rema
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