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Peso GS Weekly: Rally fueled by surprise BSP’s rate cut
The BSP’s surprise rate cut ignites the biggest bond rally of the year, driving yields to multi-month lows and opening fresh opportunities in the 7- to 10-year bond space.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
Peso Government Securities (GS) started the week on the defensive, as US Treasury yields climbed and the USD/PHP breached the 58.00 level, dampening sentiment. Dealers led the move, lifting yields by 4–6 basis points (bps) day-on-day, while client activity stayed muted. On the supply side, the Bureau of the Treasury (BTr) fully awarded Treasury Bill (T-Bill) auctions, but rates printed 5–15 bps higher than the prior week, realigning with secondary market levels. Overall, the tone remained cautious as investors awaited key local data releases.
By mid-week, the softer September inflation data of 1.70%—below the 1.90% consensus—failed to ignite a rally, with bonds trading range-bound amid strong two-way flows. The BTr successfully awarded both the 3-year and 10-year au
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