Treasury bills, bonds may fetch mixed rates as Fed view shifts

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) to be offered this week could end mixed following hawkish signals from the US Federal Reserve.

- Aaron Michael C. Sy with Reuters

The Bureau of the Treasury (BTr) will auction off P22 billion in T-bills on Monday, or P7 billion in 91-day securities and P7.5 billion each in 182and 364-day papers.

On Tuesday, the government will offer P35 billion in a dual-tenor T-bond offering, or P20 billion in reissued seven-year papers with a remaining life of four years and eight months, and P15 billion in reissued 10-year securities with aremaining life of nine years and five months.

‘T-bill and T-bond rates could follow the mixed week-on-week movements seen at the secondary market after Fed Chair Jerome H. Powell signaled that a December rate cut could be unlikely, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Yields on government securities traded flat to 2 basis points (bps) higher as players were spooked by the hawkish Fed cut. Bullish sentiment remains intact though, and players are merely playing it safe heading into [this] week’s five-year and 10-year auction,” a trader said in an email.

The trader said the bond offerings will likely be “well received,” with the reissued seven-year papers expected to fetch rates of 5.635% to 5.675% and the reissued 10-year debt seen drawing bid yields of 5.9% to 5.95%.