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Peso GS Weekly: More dovish BSP spurs buying interest
We continue to recommend selling on rallies to lock in profits following the significant move lower in GS yields last week.
By Metrobank Local Currency Trading Department and Geraldine Wambangco
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WHAT HAPPENED LAST WEEK
The peso government securities (GS) market started quietly with the Treasury Bill (T-bill) and Treasury Bond auctions pushed backed by a day due to the Manila Day holiday, and with most players reluctant to take positions ahead of the Bangko Sentral ng Pilipinas (BSP) Monetary Board meeting and the release of the Bureau of the Treasury’s (BTr) third quarter borrowing program.
Towards the latter half of the week, risk appetite began to turn to the upside with a slew of catalysts invigorating buying interest for peso GS.
Starting off with last Wednesday’s reissuance of the 20-year benchmark Fixed Rate Treasury Note (FXTN) 20-27, the BTr fully awarded the reissuance at a high of 6.900% and an average of 6.860%, or towards the lower-end of the market’s expected range.
W
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