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Peso GS Weekly: Better value in the belly amid rising yields
Players repositioned in 5- to 10-Year bonds at elevated levels on rising US Treasuries, inflation worries
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
The local government securities (GS) market had a challenging week marked by cautious sentiment and rising yields across the curve. Activity for the week was mostly subdued as participants awaited key events such as the last 20-Year auction for the year.
In last Monday’s Treasury bills auction, the average awarded yields rose modestly by 1.7 basis points (bps) across the curve. Participants de-risked ahead of the Bureau of Treasury’s (BTr) auction, as risk aversion deepened amid elevated global yields and rising USD/PHP exchange rate.
Last Tuesday, the BTr fully awarded the reissuance of the 20-Year Fixed Rate Treasury Note 20-27 at an average of 6.095%, with accepted bids ranging from 6.048% to 6.12%, or just within market indications. The auction met light demand