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Peso GS Weekly: Currency volatility fuels tactical moves
A wild swing in USD/PHP reignited tactical buying in Peso Government Securities (GS), but caution prevails ahead of key supply and inflation data.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
Trading opened quietly at the start of the week, as investors stayed on the sidelines, awaiting fresh catalysts. Benchmark yields rose 1–1.5 basis points (bps) in line with global moves, with the 10-73 (9.5-year) underperforming, climbing 3.5 bps to 5.935%. Activity was concentrated in the 3 to 10-year space, while the Bureau of the Treasury’s (BTr) bills auction drew strong demand, with a bid-to-cover ratio of 3.88 times. Yields on awarded bills were flat to 2.6 bps lower, reflecting continued appetite for short-term instruments.
By mid-week, risk sentiment deteriorated sharply, as USD/PHP breached the 59.00 level and triggered knee-jerk selling in GS. Benchmark yields rose up to 5 bps, with 10-69 (7-year) hitting 5.870%. Afternoon buying emerged, as participants b
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