Government Securities
The Bureau of Treasury made a partial award of last Monday’s Treasury Bill auction. Average yields for the 91-, 182- and 364-day bills were at 2.008% (- 16.6 bps), 2.172% (- 10.2 bps), and 2.488% (+ 3.8 bps), respectively. The rates fell amidst benign inflation data and S&P’s credit upgrade the previous week. The BTr put a cap on the bids for the year papers, as it accepted only P3.2 billion out of the P4.0 billion offer. Total tenders amounted to P13.755 billion.
Read: "Track Beauty of the Week - Murielle Ahouré"
Secondary market rates inched upward during the early parts of last week. Yields again dove in the last two days of trading, as news of BIR’s larger June 2012 collections and the BSP’s slashing of the SDA rates by 3.25 bps drove up demand for long-term government securities. FXTN 20-17 fell from a weekly high of 5.7725% to 5.6575% on Friday. RTB 20-1, meanwhile, dropped from 5.86% to 5.75%.
The Bureau of Treasury made a partial award of last Monday’s Treasury Bill auction. Average yields for the 91-, 182- and 364-day bills were at 2.008% (- 16.6 bps), 2.172% (- 10.2 bps), and 2.488% (+ 3.8 bps), respectively. The rates fell amidst benign inflation data and S&P’s credit upgrade the previous week. The BTr put a cap on the bids for the year papers, as it accepted only P3.2 billion out of the P4.0 billion offer. Total tenders amounted to P13.755 billion.
Read: "Track Beauty of the Week - Murielle Ahouré"
Secondary market rates inched upward during the early parts of last week. Yields again dove in the last two days of trading, as news of BIR’s larger June 2012 collections and the BSP’s slashing of the SDA rates by 3.25 bps drove up demand for long-term government securities. FXTN 20-17 fell from a weekly high of 5.7725% to 5.6575% on Friday. RTB 20-1, meanwhile, dropped from 5.86% to 5.75%.
Foreign Exchange
The Peso depreciated against the U.S. Dollar at the start of the week, as the BSP made moves to curb foreign speculative flows by enacting tougher measures on SDA placements. The Peso, as a result, shed P0.155 against the U.S. Dollar on Monday, closing the day at P41.945. The local currency rebounded by P0.085 (P41.86, + 0.085) the next day on robust export figures and the decision by European Finance ministers to expedite the EUR 30 Billion capitalization of Spanish banks.
Renewed global growth concerns on weaker Chinese economic data, as well as the FOMC’s silence on additional stimulus, stoked risk aversion towards the end of the week. The Peso capped the week at P41.98 (+ 0.10). Total weekly volume for the USD-PHP spot market amounted to $4,703.18 Million.
Stock Market
The PSEi retreated in the first four days of trading due to the aforesaid factors. The main index surrendered a total of 157.49 points, closing at 5,205.19 (-30.25) on Thursday. The PSEi rebounded by 9.33 points on Friday, to cap the week at 5,214.52.
Rates Forecast
The upcoming budget data and the Monetary Board meeting could bode well for secondary market yields. The budget deficit is expected to be benign, amidst improving revenue collections despite the accelerated pace in spending. Officials of the BSP have also indicated that key policy rates should stay unchanged. Long-term GS yields, under these circumstances, could fall by an additional 5 to 10 bps in the coming days – unless foreign news sour market sentiment.
The BTr will issue a new series of 7-year T-Bonds this Tuesday. The coupon for the new paper could range from 4.875% to 5.000%, in light of last week’s decline in secondary market yields.
Sources: Business World, PDEX, Philippine Daily Inquirer, Bloomberg
The Peso depreciated against the U.S. Dollar at the start of the week, as the BSP made moves to curb foreign speculative flows by enacting tougher measures on SDA placements. The Peso, as a result, shed P0.155 against the U.S. Dollar on Monday, closing the day at P41.945. The local currency rebounded by P0.085 (P41.86, + 0.085) the next day on robust export figures and the decision by European Finance ministers to expedite the EUR 30 Billion capitalization of Spanish banks.
Renewed global growth concerns on weaker Chinese economic data, as well as the FOMC’s silence on additional stimulus, stoked risk aversion towards the end of the week. The Peso capped the week at P41.98 (+ 0.10). Total weekly volume for the USD-PHP spot market amounted to $4,703.18 Million.
Stock Market
The PSEi retreated in the first four days of trading due to the aforesaid factors. The main index surrendered a total of 157.49 points, closing at 5,205.19 (-30.25) on Thursday. The PSEi rebounded by 9.33 points on Friday, to cap the week at 5,214.52.
Rates Forecast
The upcoming budget data and the Monetary Board meeting could bode well for secondary market yields. The budget deficit is expected to be benign, amidst improving revenue collections despite the accelerated pace in spending. Officials of the BSP have also indicated that key policy rates should stay unchanged. Long-term GS yields, under these circumstances, could fall by an additional 5 to 10 bps in the coming days – unless foreign news sour market sentiment.
The BTr will issue a new series of 7-year T-Bonds this Tuesday. The coupon for the new paper could range from 4.875% to 5.000%, in light of last week’s decline in secondary market yields.
Sources: Business World, PDEX, Philippine Daily Inquirer, Bloomberg
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