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Peso GS Weekly: Cautious investors shift to long-term securities
Upward momentum on global yields and the dollar-peso exchange rate has kept risk-taking at bay.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
The local government securities (GS) market started the week with decent two-way activity. As there was no bond auction by the Bureau of the Treasury (BTr) last week, medium- to long-term bonds were heavily sold, following the strong US jobs data.
Local yields initially rose 9 to 19 basis points (bps) where the 20-year benchmark touched the 6.00% handle. However, bottom-fishers or investors looking for opportunities on recently declining securities were quick to reposition to take advantage of elevated levels, pushing yields down midweek. Their repositioning pared the losses at the onset of the trading week.
Cautious trading was seen for the remainder of the week, with both global bond yields and the dollar-peso exchange rate remaining elevated. Participants also li