PESO FIXED INCOME
MARKET REVIEW: Yields dropped by 5-10bps as market sentiment improved on indication that the Bureau of Treasury has sufficient cash and can reject high market bids. Market players positioned ahead of the PHP25.6bn GS maturities. At the week’s close, the 10-yr BVAL benchmark rate decreased 10bps to 5.966%, while the 2-year benchmark rate declined 1bp to 5.96%, week-on-week.
MARKET OUTLOOK: Market activity may likely be sporadic but the downward trend remains intact. Risks to the view will be driven by US Treasuries’ move following a data-filled calendar in the first week of May.
DOLLAR FIXED INCOME
MARKET REVIEW: At week’s close, 2-, 5- , 10- and 30-yr UST(s) yields decreased by an average of 3bps. This was driven by good 2-year auction results. Downbeat business sentiment in the Eurozone, weak inflation data in Australia and weak German business climate index also fueled demand for US Treasuries. Meanwhile, trading in ROPs was relatively muted following the Holy Week break. On the ROP front, 2-, 5, 10- and 25-year yields closed lower by an average of 7bps week-on-week, broadly tracking the movement of US Treasuries.
MARKET OUTLOOK: Some volatility may be in the cards for the US Treasury market over the next week on the back of key data releases and an FOMC meeting. While no changes in the Federal Funds Rate is expected, markets will be keen on Chair Jerome Powell’s statements and insights during the press conference scheduled after the meeting. On the local front, Philippine finance officials are currently on a roadshow to assess market interest for a Euro-denominated bond issuance. This would provide euro investors a rare opportunity to invest in an Asian sovereign issuer given the scarcity of such deals.