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Peso GS Weekly: Hawkish BSP triggers de-risking
A dovish Fed lift was swiftly undone, as hawkish BSP guidance pushed local yields decisively higher.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
Local bonds opened on a weak footing, as higher US Treasury yields over the long weekend spilled into the Peso Government Securities (GS) market. The curve steepened, led by the 10-year benchmark (10-73), which climbed to 5.895%. Meanwhile, belly and intermediate tenors rose 3–4 basis points (bps). Selling reflected global rate pressures rather than local fundamentals.
At mid-week, attention shifted squarely to central bank decisions, with markets positioning for both the Federal Open Market Committee (FOMC) and Bangko Sentral ng Pilipinas (BSP) policy meetings. Initial trading remained cautious, tracking global yields, though some bottom-fishing emerged ahead of policy announcements. The US Federal Reserve’s rate cut and dovish tone briefly supported bonds, pushing
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