Treasury bill yields drop with Fed set to resume easing cycle

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday as average rates dropped across the board, with the three-year tenor’s yield falling below the 5% mark, as the US Federal Reserve is expected to resume its easing cycle this week.

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The Bureau of the Treasury (BTr) raised P25 billion as planned from the T-bills it placed on the auction block as the offering was more than six times oversubscribed, with total bids reaching P154.154 billion. However, this was slightly lower than the P156.428 billion in tenders recorded on Sept. 8.

Broken down, the Treasury borrowed P8.5 billion as planned via the 91-day T-bills as total tenders for the tenor reached P47.86 billion. The three-month paper was quoted at an average rate of 4.95%, down by 9.6 basis points (bps) from the 5.046% recorded in the previous auction. Yields accepted were from 4.908% to 5%.

The government likewise raised P8.5billionas programmed from the 182-day securities as tenders amounted to P53.92 billion. The average rate of the six-month T-bill was at 5.148%, easing by 7.4 bps from the 5.222% fetched last week, with accepted rates spanning from 5.11% to 5.175%.

Lastly, the Treasury sold the planned P8billion in 364-day debt as demand for the tenor totaled P52.374 billion. The average rate of the one-year T-bill dropped by 10.4 bps to 5.272% from 5.376% previously. Tenders awarded carried rates from 5.263% to 5.283%.