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Peso GS Weekly: Market awaits key auctions and central bank decisions
Investors eye 10-year bond auction and potential rate cuts, as market sentiment remains cautiously optimistic.
By Metrobank Local Currency Trading Department and Maria Christina Virtudazo
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WHAT HAPPENED LAST WEEK
The week began with increased selling in the local government securities (GS) market. Investors were selling bonds to secure profits and reduce their holdings before the Bureau of Treasury’s (BTr) 5-Year auction and the release of U.S. inflation data.
On Tuesday, the BTr successfully awarded all offered 5-Year Fixed Rate Treasury Notes (FXTN) at an average interest rate of 6.058%. Midweek, investors became more interested in buying bonds due to falling global interest rates, despite higher-than-expected US inflation data of 2.5% year-on-year.
Renewed expectations of a significant interest rate cut by the US Federal Reserve encouraged more bond buying. Investors focused on purchasing medium-term bonds. The interest rates on benchmark bonds fell slightly: the 5-year b