Peso GS Weekly: Bonds grapple with year-end seasonality

What happened last week

At the beginning of the week, the market opened on a quiet note, with most participants staying on the sidelines while awaiting fresh domestic catalysts. Activity eventually picked up, led by the R5-18 (3.2Y) bond, which accounted for the bulk of traded volume, while strong buying interest pushed the 5-year R5-19 and the 10-year benchmark 10-73 lower by 4–5 basis points. This initial rally was largely driven by dealers and local real-money accounts “picking tops” following the magnitude of the recent sell-off.

Mid-week, local bonds traded within their recent ranges as market participants awaited the next catalysts that could significantly influence yields. Most benchmark bonds closed within a single basis point of their previous levels, although the RTB 5-19 provide