DOWNLOAD
Peso GS Weekly: Go for longer term bonds at current levels
The absence of supply risk until year-end is likely to be supportive of government securities in the medium-term.
By Geraldine Wambangco
Read this content. Log in or sign up.
If you are an investor with us, log in first to your Metrobank Wealth Manager account.
If you are not yet a client, we can help you by clicking the SIGN UP button.
WHAT HAPPENED LAST WEEK
It was a quiet start in the peso government securities (GS) market last week, with activity driven mostly by buying interest in 4- to 6-year bonds given that longer-term GS currently do not offer much term premium over this tenor bucket.
The November domestic inflation print came out slightly lower-than-expected at 4.1% year-on-year vs. the 4.3% median estimate, which triggered some immediate buying in the 10-year space.
The Bureau of the Treasury (BTr) then fully awarded the reissuance of 10-year Fixed Rate Treasury Note (FXTN) 10-71 at an average of 6.224% and a high of 6.244%, or just well within market expectations. The relatively tepid auction reception, which was only 2x oversubscribed, failed to boost the market’s appetite and led to some profit-taking in lon