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Peso GS Weekly: Investors cash in as rates fall
Investors are buying more long-term government bonds after the Burea of the Treasury announced it will sell fewer bonds in the next three months.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
The local government securities (GS) market saw another volatile week with better selling interest to start the week as players continued to lock in gains given lower yields, translating to higher prices.
On Tuesday, the Bureau of the Treasury (BTr) fully awarded the reissuance of the 20-Year Fixed Rate Treasury Note 20-27 at an average of 5.861%, with accepted yields ranging from 5.750% to 5.899%. The relatively weak auction participation, which only registered a bid-to-cover ratio of 1.77x, gave way to further de-risking, led by bonds in the back-end of the curve.
Risk sentiment eventually took a turn following the statements from Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. regarding the possibility of two more policy rate cuts for the rest of the year.