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Peso GS Weekly: Tracking the global bond space for direction
Investors will be closely monitoring the US inflation print and the US Fed’s policy rate decision this week. We continue to recommend loading up on long-term government securities through the upcoming auctions of the Bureau of the Treasury.
By Metrobank Local Currency Trading Department and Geraldine Wambangco
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WHAT HAPPENED LAST WEEK
The peso government securities (GS) market tracked the movement in global yields most of the week.
Buying interest persisted as the 7-year auction, the reissuance of Fixed Rate Treasury Note (FXTN) 20-17, was awarded at the lower end of the market’s expected range where the average cleared at 6.624% with a high of 6.649%.
Toward the middle of the week, domestic inflation for May printed at 3.90%, a tad lower than the expected 4.00%, but higher than the 3.80% posted in April. However, the Bangko Sentral ng Pilipinas (BSP) said that risks to the inflation outlook continue to lean toward the upside because of higher transport charges, elevated food prices, and increases in global oil prices.
Week-on-week, short-term peso GS traded within a tight range, while yields of