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Peso GS Weekly: Local bond yields may continue their descent
Will the market continue to suppress its appetite for longer-tenor bonds? For this week, we believe these five bonds deserve your attention.
By Government Securities Trading Department
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WHAT HAPPENED LAST WEEK
Yields of peso government securities (GS) took their cue from the global bond market following the rally in US Treasuries, as better buying interest was seen ahead of the 13-year auction on Tuesday.
The Bureau of the Treasury (BTr) fully awarded PHP 35 billion for the reissuance of Fixed Rate Treasury Note (FXTN) 25-7 with an average yield of 7.182% and a high of 7.23%. Given the oversubscription of 5.29x, the BTr offered another PHP 5 billion via the TAP facility, which was easily absorbed by the market. Given the strength of the auction, aggressive position-taking was seen for 12- to 13-year bonds as yields were lifted down to 6.95% to 7.00%.
Continued buying interest was seen the rest of the week despite statements from Bangko Sentral ng Pilipinas (BSP) Governor