Risk sentiment improved early in the week after dovish remarks of US Federal Reserve (Fed) officials at Jackson Hole Symposium, pushing benchmark peso bonds 4–7 basis points (bps) lower as investors bought across the curve. The newly issued 5-year RTB 5-19 led activity, while long-dated bonds also attracted strong demand.
By mid-week, focus shifted to the Bureau of the Treasury’s (BTr) dual-tranche auction of 3-year and 25-year bonds, which saw solid demand in the shorter tenor but weaker interest in the long end. Local bonds remained well-bid ahead of the Bangko Sentral ng Pilipinas’s (BSP) monetary policy decision, with yields drifting lower across the 5–10-year space.
At the end of the week, the BSP’s move to cut policy rates by 25 bps to 5.00%, citing benign inflation, triggered profit-taking and a sell-off in government securities. Benchmark yields rose 5–10 bps, as both dealers and offshore accounts trimmed positions, leaving most bonds higher week-on-week despite some late bargain-hunting.
Read Metrobank’s related report: BSP Update: Turning less dovish
\This week, peso government securities trading will take cues from global bond market moves, and eyes are turned to US inflation data and its implications for the Fed’s September decision. Locally, attention turns to the 7-year reissuance of 10-69, with early guidance at 5.90–6.00%, where investors may find value after the recent correction.
JANSSEN ROMAN is an Investment Counselor at Metrobank, under the Institutional Investors Coverage Division. His expertise was built upon his previous roles as an Investment Specialist and Financial Markets Sector Management Trainee within Metrobank. He is pursuing his Master of Arts in Economics from Ateneo de Manila University and has earned other certifications and licenses from various regulators and educational institutions. Outside work, he dabbles in photography, travel, and motorcycle riding.
