T-bill and bond rates could move sideways ahead of Fed meeting
The RATES of government securities could move sideways this week on the flUS yield curve easing ahead of Federal Reserve policy meeting.
The Treasury Office (BTr) is seeking to raise P15 billion via Treasury bills (T-bills) which it will auction off Tuesday, or 5 billion pesos each in 91, 182 and 364-day debt securities.
On Wednesday the BTr will be offuh P35 billion in reissued FiFive-year Treasury bills (T-bonds) with a residual maturity of four years and Fifive months.
A bond trader said Treasury bill rates could move sideways with an upward trend, while the yields on reissued securities Fifive-year ratings could range from 3.7% to 3.9%.
“Central bank action abroad remains the focus of many traders, as rate hikes may not be that far away. But the flthe weakening of the yield curve in the United States could limit the increase in high local rates. The flattention may indicate that investors believe the economic recovery has peaked in the near term, ”the trader said in a Viber message.
Meanwhile, the chief economist of Rizal Commercial Banking Corp. Michael L. Ricafort said Treasury yields could be slightly lower, in line with a slight weekly short-term drop in local rates and most long-term yields as trading resumes early in the L Iran nuclear deal could ease sanctions on Iranian oil exports.
“As a result, world oil prices were corrected to their one-week low, against new seven-year highs… (The) stronger peso and the downward correction in world oil prices resulted in a healthy downward correction in local and US / global bond yields, as may be reflected in upcoming government securities auctions, ”he said in a Viber message.
Mr Ricafort said Treasury bond yields could also follow the slight easing in secondary market rates and hover between 3.7% and 3.8%.
U.S. crude oil prices rose on Friday amid expectations of continued production cuts in oil-exporting countries, Reuters reported, but noted that oil benchmarks fell week after week after hitting record highs on Monday.
Brent crude rose 6 cents to $ 84.38, while US West Texas Intermediate crude rose 76 cents to $ 83.57.
Meanwhile, in the secondary market, 91-182 and 364-day T-bills were quoted at 1.2131%, 1.4488% and 1.6228% respectively, while the FiThe five-year bond closed at 3.7771%, based on the PHL Bloomberg valuation benchmark rates posted on the Philippine Dealing System website.
The government made a full allotment of treasury bills which it auctioned off last week as investors continue to prefer to park their funds in short-term securities in the midst offlfears of the nation.
Broken down, the BTr raised 5 billion pesos as planned via 91-day debt securities from 9.3 billion pesos in tenders. Three-month Treasury bills reached an average rate of 1.119%, up 0.6 basis points (bps) from the 1.113% seen the week before offer.
The BTr also borrowed P5 billion as scheduled from the 182-day securities he offered last week as offers hit P14.201 billion. The average six-month Treasury bill rate slipped 0.3bp to 1.387% from 1.39% previously.
Finally, the government allocated the 364-day treasury bills to the tune of 5 billion pesos, the tenor having attracted tenders worth 11.22 billion pesos. The average yield on one-year instruments was 1.606%, up 0.2bp from the 1.604% recovered the previous week.
Meanwhile, the last time the BTr auctioned off the reissued debt securities offered on Wednesday was on October 12, when it allotted the full 35 billion pesos on offer out of total tenders of 56. , 08 billion pesos.
Five-year bonds reached an average rate of 3.576%, higher than the 2.746% recorded at the previous auction and the coupon rate of 3.375%.
BTr plans to borrow 200 billion pesos in the domestic market in November, or 60 billion pesos in treasury bills and 140 billion pesos in treasury bonds.
The government wants to borrow P3 trillion from domestic and external sources this year to help finance a budget ofFicit reached 9.3% of gross domestic product. – Jenina P. Ibañez