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Peso GS Weekly: Better to buy amid drop in global yields
A drop in global yields and the USD/PHP exchange rate encouraged more buying activity in the local GS market.
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 last week with better buying interest, tracking the rally seen in US Treasuries. Dealers took this opportunity to take profit on their holdings to free up liquidity. However, the local yields underperformed the rally in global bonds, as traders were hesitant to take positions amid an elevated USD/PHP exchange rate around the 59.00-level.
Elsewhere, the Bureau of Treasury (BTr) fully awarded all T-bill auctions. Despite reducing the volume offered to PHP 15 billion from the recent PHP 20 billion offerings, awarded yields still rose by as much as 3.4 basis points (bps) week-on-week due to minimal end-user demand.
By Tuesday, the BTr concluded their 5-year bond auction of Fixed Rate Treasury Note 7-67 with an average