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Peso GS Weekly: Growing opportunity for higher yields
Investors in peso government securities are seen to remain opportunistic, especially for long-term bonds, with the possible uptick in yields from a strong US economy.
By Geraldine Wambangco
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WHAT HAPPENED LAST WEEK
Yields of peso government securities (GS) market initially traded higher last week as it tracked the move in US yields and, as liquidity was siphoned off by the Bureau of the Treasury (BTr) in its Retail Treasury Bond (RTB) offering.
Yields have started to touch new year-to-date highs with 10-year bond, Fixed Rate Treasury Note (FXTN) 10-71 getting sold up to 6.3% early in the week. The level, however, failed to break higher as strong demand was seen from clients looking for long-term peso GS.
The peso yield curve also started to steepen after short-dated securities were bought by offshore participants looking for additional carry as they held their short USD/PHP positions.
Some paring of losses was eventually seen before the week ended as the aggressive selling int