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Peso GS Weekly: Defensive bidding seen amid bearish market sentiment
The treasury may still reject the 20-year auction despite pessimism in the market.
By Geraldine Wambangco and Metrobank Government Securities Trading Department
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WHAT HAPPENED LAST WEEK
The peso government securities (GS) market continues to be under duress, with yields 15-25 basis points (bps) higher on the back of soaring global yields. Additionally, with the USD/PHP exchange rate reaching new year-to-date (YTD) highs, selling interest was seen for some offshore participants, which further exacerbated the move higher.
In the auction front, the Bureau of the Treasury (BTr) rejected all bids for the reissuance of Fixed Rate Treasury Note (FXTN) 20-23 given how defensive or how high the bids were. Had the BTr fully awarded the auction, the high would have been set at 7.299%. Despite this, the rejected auction failed to bring relief in the local space as selling interest persisted.
The end of the week was met with further selling activity from player