Peso GS Weekly: Focus is on the US and PH GDP prints
Aim for longer-dated bonds through the upcoming auctions and a potential Retail Treasury Bond (RTB) primary issuance next month.
WHAT HAPPENED LAST WEEK
It was a choppy week in the peso government securities (GS) market as players grappled with a strong Fixed Rate Treasury Note (FXTN) 7-71 auction combined with US Treasury yields retracing higher.
Initially, the Bureau of the Treasury (BTr) fully awarded PHP 30 billion of FXTN 7-71, setting the coupon of the 7-year bond at 6.125%. The auction’s bid-to-cover ratio was over 3.5x, with tendered bids reaching as high as PHP 107.095 billion. Due to strong demand seen in the auction, the BTr opened the TAP Facility for PHP 5 billion, which had a non-competitive award of 10.121%.
The better-than-expected auction results led to decent buying interest during the early part of the week, with players mostly buying medium- to long-term peso GS.
This relief rally, however, was s