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Peso GS Weekly: For tactical clients, be better sellers of long-term peso GS
Investors will be closely watching the policy rate decision of the Monetary Board. There are opportunities for tactical clients to make money.
By Geraldine Wambangco
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WHAT HAPPENED LAST WEEK
It was a volatile week for the peso government securities (GS) market as opportunistic buyers were easily met by profit-takers.
Heading into the 10-year auction on Tuesday, better buying interest was seen as the 10-year bond was taken down to as low as 5.685% but closed the morning at 5.70%. The Bureau of the Treasury (BTr) then fully awarded the re-issuance of Fixed Rate Treasury Note (FXTN) 10-69 at an average of 5.732% and a high of 5.76%, or at the lower end of market indication. Despite the lower than anticipated auction results, profit-takers were quick to emerge as yields of medium to long-term peso GS rose by 5 basis points (bps).
The better-than-expected US April inflation and local first quarter Gross Domestic Product (GDP) data allowed the market to trade