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Peso GS Weekly: Take profit in long-dated bonds
Players are better sellers on long-dated securities and can reposition through auctions at better levels.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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What happened last week
The local government securities (GS) market saw minimal trading activity at the start of last week. However, demand for Treasury bills (T-bills) remained strong, allowing the Bureau of the Treasury (BTr) to increase awards for 3- and 6-month T-bills. Average yields dropped by up to 42.3 basis points (bps) week-on-week.
On Tuesday, better buying interest emerged as local GS tracked the overnight rally in US Treasuries. The auction for the 10-Year Fixed Rate Treasury Note (FXTN) 10-72 saw strong demand, awarded at an average of 6.251% and a high of 6.270%. The auction was well-received, which prompted the BTr to award more through a tap facility auction, bringing the total awarded amount to PHP 40 billion overall.
By midweek, trading remained sideways, with the curve
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