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Peso GS Weekly: Yields recede amid BSP’s pause
Local markets found a fragile stability as an off-cycle Bangko Sentral ng Pilipinas’ (BSP) hold, and lower oil prices countered the pressure of a weaker Peso.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
At the beginning of last week, higher global rates and the peso revisiting the 60 per dollar level put upward yield pressure on the Peso Government Securities (GS). Pronounced de-risking saw 5-year benchmarks rise by 27 to 38 basis points, while the 10-year yield moved above the 7.00% psychological threshold. Weak demand was also evident in the T-bill auction, where the Bureau of the Treasury (BTr) was forced to raise rates to award the 3-month and 6-month tenors.
Mid-week, sentiment shifted toward recovery, as plunging global oil prices helped temper local inflation concerns, prompting aggressive buying in the 1-to-3-year sector. This momentum was bolstered by an off-cycle BSP Monetary Board meeting last Thursday, where officials left policy interest rates steady t
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