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Peso GS Weekly: Take profits at current levels
For those with longer-term bonds, it is a good time to take profits ahead of the treasury’s auctions for the remainder of the second quarter.
By Geraldine Wambangco, Metrobank Local Currency Trading Department
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WHAT HAPPENED LAST WEEK
It was a lackluster start in the peso government securities (GS) market last week given the absence of fresh catalysts to move yields, and dealers were mostly seen servicing client requirements.
The auction for Fixed Rate Treasury Note (FXTN) 20-23 saw little participation as it garnered only around PHP 37 billion of tenders. The Bureau of the Treasury (BTr) partially awarded the 15-year reissuance and capped the high at 6.994% to award around PHP 11.5 billion of bids. To fully award the auction, they would have had to accept up to 7.259%. Some players were enticed by the BTr’s move to cap awards, but the buying interest failed to translate to a sizable move in the peso GS market.
The sharp move lower in global yields amid a slowdown in US inflation figures was the