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Peso GS Weekly: Bonds firm on oil drop, Philippine auction clarity
Local bonds rallied last week, as easing geopolitical tensions and the Philippine government’s clearer Q3 borrowing path restored risk appetite.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
At the beginning of the week, local bonds opened on the defensive after US missile strikes on Iran dampened risk sentiment. Yields spiked, with 10-73 reaching a high of 6.485%, but selective buying re-emerged at elevated levels, helping benchmark yields settle modestly higher by the session close.
By mid-week, sentiment turned constructive amid easing Middle East tensions and a drop in oil prices, which led to strong demand for longer-dated bonds. Notably, the 7- to 10-year space outperformed as investors sought duration, pushing 10-69 and 10-73 down by 7.5 basis points (bps) to 6.195% and 6.375%, respectively.
Toward the end of the week, trading was anchored by anticipation of the Bureau of the Treasury’s (BTr) third quarter borrowing schedule. Despite active flows
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