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Peso GS Weekly: Opportunistic buyers emerge amid elevated yields
While the rise in global yields and the USD/PHP exchange rate kept risk sentiment weak, some players see opportunity to load up on government securities at current levels.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
Risk sentiment in the local government securities (GS) market remained weak for the better part of last week as global yields and the USD/PHP exchange rate traded at multi-month highs. Selling interest was apparent in long-term bonds, with some players off-loading duration as they re-assess the central bank’s monetary path.
The inclement weather brought about by the recent typhoon also led to slower market activity, with most dealers just managing client requirements. Some opportunistic buying interest, however, emerged as players capitalize on the move to load up on GS at relatively elevated levels.
Towards the end of the week, the effectivity of the Reserve Requirement Ratio (RRR) cut failed to materially move the GS curve, with liquidity suspected to go back to t