Government Securities
Yields for last Tuesday’s 7-year Treasury Bond auction fetched a coupon rate of 4.75%, within market expectations. Total tenders amounted to P20.951 billion for the fully awarded P9.0 billion offer.
Secondary GS yields fell throughout most of last week, amidst the absence of any upward pressures in domestic interest rates. Buying interest was stoked by expectations of negligible fiscal deficit, next week’s Monetary Board meeting, and to some extent, hopes of further monetary easing by the U.S. Fed. Yields for FXTN 20-17 dove to 5.555% on Friday afternoon, down 7 bps from Monday’s levels. Likewise, FXTN 25-8 bottomed at 5.725% from 5.80% on Monday. The 10-year FTXN’s also saw relatively higher volumes, as rates for these papers fell below 5.0% for the first time in four months.
Yields for last Tuesday’s 7-year Treasury Bond auction fetched a coupon rate of 4.75%, within market expectations. Total tenders amounted to P20.951 billion for the fully awarded P9.0 billion offer.
Secondary GS yields fell throughout most of last week, amidst the absence of any upward pressures in domestic interest rates. Buying interest was stoked by expectations of negligible fiscal deficit, next week’s Monetary Board meeting, and to some extent, hopes of further monetary easing by the U.S. Fed. Yields for FXTN 20-17 dove to 5.555% on Friday afternoon, down 7 bps from Monday’s levels. Likewise, FXTN 25-8 bottomed at 5.725% from 5.80% on Monday. The 10-year FTXN’s also saw relatively higher volumes, as rates for these papers fell below 5.0% for the first time in four months.
The difference between 2- and 20-year debt declined to 290 bps from 298 bps a week earlier, as the longer end of the curve shifted downwards. This is the flattest the yield curve had been since March 2012. Total weekly volume amounted to P172 billion.
Foreign Exchange
Stimulus hopes from China and the U.S. fanned risk appetite. The Peso appreciated by P0.30 against the U.S. Dollar in the first three days of trading. The local currency closed at P41.68 (+0.045) on Wednesday, matching its highest level against the Dollar this year. It closed the week at P41.860 ( -0.105). Total weekly volume for the USD-PHP spot market amounted to $4,401.18 million.
Stock Market
After gaining 83.47 points on Monday (5,297.99) on stimulus news, the PSEi shed 108.62 points in the next three days, amidst lower economic growth forecasts by the IMF and disappointing retail sales data in the U.S. The main index rebounded by 21.52 points on Friday, to cap the week at 5,210.89. Total weekly volume amounted to P31.72 billion.
Foreign Exchange
Stimulus hopes from China and the U.S. fanned risk appetite. The Peso appreciated by P0.30 against the U.S. Dollar in the first three days of trading. The local currency closed at P41.68 (+0.045) on Wednesday, matching its highest level against the Dollar this year. It closed the week at P41.860 ( -0.105). Total weekly volume for the USD-PHP spot market amounted to $4,401.18 million.
Stock Market
After gaining 83.47 points on Monday (5,297.99) on stimulus news, the PSEi shed 108.62 points in the next three days, amidst lower economic growth forecasts by the IMF and disappointing retail sales data in the U.S. The main index rebounded by 21.52 points on Friday, to cap the week at 5,210.89. Total weekly volume amounted to P31.72 billion.
Rates Forecast
Expect yields for this Monday’s Treasury Bill auction to fall by 5 to 10 bps, as it aligns with the lower secondary market yields. The 91-, 182-, and 364-day bills last fetched 2.008%, 2.172% and 2.488%, respectively, in the secondary market.
The Monetary Board will meet on Thursday, coinciding with the release of the budget data. Downward momentum might continue prior to the 26th of July, especially if foreign news turn out to be conducive for speculative flows into the local markets.
Expect yields for this Monday’s Treasury Bill auction to fall by 5 to 10 bps, as it aligns with the lower secondary market yields. The 91-, 182-, and 364-day bills last fetched 2.008%, 2.172% and 2.488%, respectively, in the secondary market.
The Monetary Board will meet on Thursday, coinciding with the release of the budget data. Downward momentum might continue prior to the 26th of July, especially if foreign news turn out to be conducive for speculative flows into the local markets.
Sources: Business World, PDEX, Philippine Daily Inquirer, Bloomberg
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