Peso GS Weekly: Going for the belly of the curve
The US presidential election continues to stir market volatility.
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WHAT HAPPENED LAST WEEK
It was a lackluster week in the local government securities (GS) market as most players were reluctant to take on positions heading into a heavy slate of risk events on the US front, and with the trading week shortened due to local holidays. De-risking activity, however, applied pressure on local yields, with the curve ending the week anywhere from 2.5 to 9.5 basis points (bps) higher.
Last Tuesday, the Bureau of the Treasury fully awarded PHP 15 billion of the 10-Year bond, Fixed Rate Treasury Note 10-72, at the average rate of 5.87%. The accepted range was from 5.828% to 5.89%, or just within market indications. The total market participation reached PHP 43.3 billion, bringing the bid-to-cover ratio to 2.89x.
The fresh supply was easily digested by the market, but