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Peso GS Weekly: Jumbo bond sale and rate cuts
Local bonds face mixed sentiment on global risks, profit-taking, jumbo bond sale, and rate cut view.
By Metrobank Local Currency Trading Department and Janssen Roman
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What happened last week
The local bond market started the week steadily after global rates dropped, with some initial buying. However, profit-taking soon took over as many investors were looking to sell their bonds. Yields on bonds from 4 to 20 years rose by 6–13 basis points (bps). The 5-year bond, FXTN 7-70, underperformed, climbing to 5.925% (+12.5 bps), while the 10-year FXTN 10-72 rose to 6.115% (+9.5 bps). The 3-month T-bill auction saw weak demand, while the 6-month and 1-year bills performed slightly better.
By midweek, market sentiment weakened as US yields dropped and trade tensions grew. The 7-year FXTN 20-17 auction received less interest, with its average rate coming in at 5.986%. Yields rose by 1.5–8 bps across the board, with FXTN 20-17 ending at 6.00%. Some players sold lon
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