Peso GS Weekly: GDP miss fuels belly-outperformance

What happened last week

At the beginning of the week, local bonds saw improved buying interest, largely tracking gains in US Treasuries and supported by better risk sentiment, as the USD/PHP rate slipped below the 59.00 level. Demand was most evident in the belly of the curve, with the 5‑ to 7‑year sector outperforming while the rest of the curve traded within a basis point of prior levels amid a mild steepening bias. Appetite for short-dated assets also showed through at the T‑bill auction, where awarded yields came in materially lower versus the previous week.

On Tuesday, the market stayed better bid, as participants scaled into positions mainly in the 5‑ to 10‑year sector, pushing yields modestly lower. The Bureau of the Treasury’s dual‑tranche auction delivered mixed results: strong de