Debt yields mixed before key US data

YIELDS on government securities (GS) traded at the secondary market ended mixed last week as the market looked ahead to the US consumer price index (CPI) data released late on Friday.

- Heather Caitlin P. Mañago with Reuters

GS yields, which move opposite to prices, slipped by an average of 0.22 basis point (bp) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of Oct. 24 published on the Philippine Dealing System's website.

At the short end of the curve, yields on the 91-, 182-, and 364-day Treasury bills (T-bills) went down by 4.45 bps (to 4.9263%), 4.03 bps (5.0977%), and 4.05 bps (5.1626%), respectively.

Meanwhile, at the belly, rates mostly went up. Yields on the four-, five-, and seven-year Treasury bonds (T-bonds) rose by 0.64 bp (5.6143%), 1.19 bps (5.7002%), and 1.81 bps (5.8252%), respectively. On the other hand, the twoand three-year papers saw their rates go down by 0.82 bp and 0.12 bp to 5.5142%, respectively.

Lastly, at the long end of the curve, the 10-, 20-, and 25-year notes climbed by 2.65 bps, 2.12 bps and 2.63 bps to yield 5.9794%, 6.4278% and 6.4258%, respectively.

GS volume traded declined to P28.52 billion on Friday from P50.28 billion a week prior.

Yield movements were mixed as the market continued taking positions amid domestic and overseas developments, analysts said.

“The short end continues to reflect recent rate cuts, while the belly to the long end succumbed to profit taking,” a bond trader said in a Viber message.

The trader said players remained cautious before the release of key US inflation data on Friday evening as these could impact the Federal Reserve's policy decision at its Oct. 28-29 meeting.

“Flush liquidity conditions and limited bond supply continued to support the front end, keeping yields anchored as investors are still positioning ahead of potential monetary policy easing amid emerging growth concerns,” Lodevico M. Ulpo, Jr., vice-president and head of fixed incomestrategies at ATRAM Trust Corp., said in a Viber message.