DOWNLOAD
What’s next for the peso GS market?
With the changing scenario in the yield curve, where long-term rates are decreasing more quickly than short-term rates, it may be time for you to tweak your fixed income portfolio.
By Metrobank Government Securities Trading Desk
Read this content. Log in or sign up.
If you are an investor with us, log in first to your Metrobank Wealth Manager account.
If you are not yet a client, we can help you by clicking the SIGN UP button.
The recent rally in peso government securities (GS) showed us that end-clients are still flush with liquidity.
The yield curve bull-flattened, a scenario in which long-term rates are decreasing more quickly than short-term rates, as demand poured into the recent 20-year issuance, which coincided with the rally in US Treasuries.
With the upcoming PHP 300-billion maturity in mind, on top of year-end demand, we believe that the peso GS market still has room for another rally. With this window of opportunity, we suggest taking profit on 10-year bonds that were bought in light of the desk’s previous trade plan, reinstating positions in Fixed Rate Treasury Note (FXTN) 20-14, as well as 12- to 20-year bonds, which provide better relative value.
Entry Levels
Exit Levels
Enter the FXTN 20-14 auct
Read More Articles About: