Peso GS Weekly: Go for longer term bonds at current levels
The absence of supply risk until year-end is likely to be supportive of government securities in the medium-term.

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WHAT HAPPENED LAST WEEK
It was a quiet start in the peso government securities (GS) market last week, with activity driven mostly by buying interest in 4- to 6-year bonds given that longer-term GS currently do not offer much term premium over this tenor bucket.
The November domestic inflation print came out slightly lower-than-expected at 4.1% year-on-year vs. the 4.3% median estimate, which triggered some immediate buying in the 10-year space.
The Bureau of the Treasury (BTr) then fully awarded the reissuance of 10-year Fixed Rate Treasury Note (FXTN) 10-71 at an average of 6.224% and a high of 6.244%, or just well within market expectations. The relatively tepid auction reception, which was only 2x oversubscribed, failed to boost the market’s appetite and led to some profit-taking in lon
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