Government Securities
The Bureau of Treasury awarded last Tuesday’s 20-year Treasury Bond re-issue in part. The BTr chose the 6.09% ceiling in accepted bids. This level approximates the 6.0904% PDST-F rate in the market, a collection of firm bid rates from the major market making banks. The re-issued FXTN 20-18 fetched an average yield of 6.024%, slightly higher than the 5.94% in the secondary market. Total tenders for the partially awarded debt sale amounted to P14.098 billion. The BTr issued P6.65 billion out of the P7.5 billion offer.
Click this link to learn more about this week's Track Beauty, Gesa Felicitas Krause
The successful election of pro-bailout Greek parties, as well as expectations of additional stimulus by the Fed, improved market sentiment. Local GS bond yields were slow to react, but momentum built up by mid-week. The big, local players went on a buying frenzy on Wednesday morning, probably due to 1H 2012 window-dressing.Yields for FXTN 20-17 shed 9 bps to reach a low of 5.88% on Wednesday morning. The 10-year FXTN 10-55 and the 24-year FXTN 25-8 each dipped by around 5 bps, amidst surprisingly robust trading volumes. The P37.66 billion worth of secondary market GS trades on 20 June (Wednesday) is the largest single day tally since March 2012.
The Bureau of Treasury awarded last Tuesday’s 20-year Treasury Bond re-issue in part. The BTr chose the 6.09% ceiling in accepted bids. This level approximates the 6.0904% PDST-F rate in the market, a collection of firm bid rates from the major market making banks. The re-issued FXTN 20-18 fetched an average yield of 6.024%, slightly higher than the 5.94% in the secondary market. Total tenders for the partially awarded debt sale amounted to P14.098 billion. The BTr issued P6.65 billion out of the P7.5 billion offer.
Click this link to learn more about this week's Track Beauty, Gesa Felicitas Krause
The successful election of pro-bailout Greek parties, as well as expectations of additional stimulus by the Fed, improved market sentiment. Local GS bond yields were slow to react, but momentum built up by mid-week. The big, local players went on a buying frenzy on Wednesday morning, probably due to 1H 2012 window-dressing.Yields for FXTN 20-17 shed 9 bps to reach a low of 5.88% on Wednesday morning. The 10-year FXTN 10-55 and the 24-year FXTN 25-8 each dipped by around 5 bps, amidst surprisingly robust trading volumes. The P37.66 billion worth of secondary market GS trades on 20 June (Wednesday) is the largest single day tally since March 2012.
However, the rally proved to be short lived. The slew of credit downgrades on some of the world’s largest banks and the relative disappoint of not having another round of quantitative easing (QE3) in the U.S. could have negatively affected local market sentiment. Trades thinned as the week drew to a close, with the market awaiting the release of budget data early next week. Secondary market rates rose by an average of 3 bps to 5 bps on Thursday.
Foreign Exchange
The Peso reached its highest level against the U.S. Dollar on Wednesday, when it closed at P42.13 (+ 0.16). However, the Dollar regained lost ground the next day, as the Fed remained mum on QE3 (P42.425, - 0.295). Weaker manufacturing data in the U.S., China, and Germany also contributed to risk aversion. Total weekly volume for the USD-PHP spot market reached $4,699.53 million.
Stock Market
The good news from abroad lifted the main index above the 5,100-point barrier Wednesday, when the PSEi closed at 5,146.46 (+ 64.85). It retreated by 37.03 points (5,109.43) on Thursday. The PSEi eked out a slight gain of 10.64 points on Friday, bucking the regional trend amidst the DJIA’s largest single day loss since December 2011. Total weekly volume for the main index amounted to P25.76 billion.
Rates Forecast
The Bureau of Treasury will release budget data for May 2012 on 25-26 June. Unless the government attains yet another budget surplus, the budget data could have a minimal influence on rate direction. The 3Q 2012 borrowing plan is a bigger factor, especially if the BTr significantly reduces its domestic borrowings. Secondary market GS yields could trade sideways with an upward bias next week, unless the aforesaid economic figures serve as catalysts for another rally.
Sources: Business World, PDEX, Philippine Daily Inquirer, Bloomberg
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