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Ask Your Advisor: Should I still buy FXTN 10-74?
Many took advantage of a new bond offer by the treasury last week. Is it still the best buy?
By Metrobank Local Currency Trading Department and Dana Louise Geronimo
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One week has passed since the issuance of the new 10-year benchmark, FXTN 10-74 (Fixed Rate Treasury Note). As the latest benchmark, it now serves as the primary reference point against which other bonds are compared.
FXTN 10-74 attracted strong demand during the auction and remained actively traded as the market established fair value levels relative to other bonds along the yield curve—which reflects yields across varying maturities such as 5, 10, or 20 years.
With prices now beginning to stabilize, the key question is: Is FXTN 10-74 still an attractive buy this week?
Current market indications suggest that the 9-year FXTN 10-73 offers better relative value than the new 10-year FXTN 10-74. Recent trading shows 10-73 at 5.895% versus 10-74 at 5.880%, placing the yield spread at only 1.5 b
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