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Peso GS Weekly: Bids for 20-year Treasury bonds exceed PHP60B
Given the expectations of lower interest rates in the medium- to long-term, we continue to recommend loading up on longer-dated bonds at current elevated yield levels.
By Geraldine Wambangco
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WHAT HAPPENED LAST WEEK
The peso government securities (GS) market opened strong last week, with better buying seen across all tenors as market players looked to roll over and reinvest their maturity proceeds from Retail Treasury Bonds (RTB) 3-11 and 5-12.
The move was further reinforced by the reissuance of the 10-year Treasury-bond, FXTN 10-72, which saw good demand.
The rally in peso GS ended during the latter half of the week amid de-risking or selling activity as the local market tracked the move higher in US yields following the higher-than-expected US inflation data prints.
Ultimately, RTB 5-18 ended the week 1 basis point (bp) lower at 6.215%, while FXTNs 10-69 and 10-72 ended 2.5-5 bps lower at 6.195% and 6.200%, respectively.
The rally lower in yields ended during the latter half