Weekly Fixed Income Summary : June 11 – 14, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Upward pressure on yields Outlook. Bond yields are expected to rise if the BSP raises its key policy rate in tomorrow’s meeting. But consensus expectation is that the Monetary Board (MB) will keep policy rates unchanged, digressing from the Fed’s hawkish tone set last week, citing easing inflation data in May. Despite recording a five-year high of 4.6%, inflation in... Read More

Weekly Fixed Income Summary : June 04 – 08, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Will BSP Follow Second Fed Hike? Outlook. We expect bond yields to remain elevated this week ahead of the expected Fed hike this Thursday (PH time). U.S. inflation also accelerated in May by 2.8% year-on-year (YoY), the fastest pace in more than six years, reinforcing the Fed’s outlook for gradual interest rate hikes while eroding wage growth that remains subdued... Read More

Weekly Fixed Income Summary : May 28 – June 01, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Rangebound on Higher Inflation Expectation Outlook. We expect the bond market to sell amid the inflation news that portend of higher interest rates, keeping the yield curve firm to elevated this week. This is amid the release of May inflation number at the low end of the BSP inflation forecast band of 4.6% – 5.4%. May headline inflation spiked to... Read More

Weekly Fixed Income Summary : May 21 – 25, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Rally on Dovish Fed, Flush Liquidity Outlook. We expect bond yields to trade sideways amid flush liquidity after the Bangko Sentral (BSP) cut the reserve requirement again by 1% to 18%, releasing an estimated Php90bn into the system. FXTN 05-72 also matured last week (Wednesday), adding another Php130bn. The cut was a move widely seen to keep domestic interest rates... Read More

Weekly Fixed Income Summary : May 14 – 18, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Sizing Up Second BSP Hike Outlook. We expect bond yields to remain elevated as US Treasuries (UST) continue to climb amid $99bn in new supply this week and as investors await the Fed minutes to be released on Wednesday (Thursday, PH time). USTs climbed to seven-year highs last week following the release of solid economic data; the 10-yr UST rose... Read More

Weekly Fixed Income Summary : May 7 – 11, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Relief Rally on BSP Hike Outlook. A relief rally, especially on the long-end, followed the Bangko Sentral ng Pilipinas’ (BSP) first 25-bp rate hike in three years and the first since the shift to an interest rate corridor system last 2016. We expect a slight flattening of the yield curve as momentum spills over this week especially in the long-end... Read More

Weekly Fixed Income Summary : April 30 – May 4, 2018

Weekly-Fixed-Income-Summary-and-Outlook
BSP Hike Imminent Outlook. We expect local bond yields to remain elevated ahead of the Bangko Sentral’s monetary board meeting this Thursday, which the market bet will finally hike rates. The BSP’s inaction has weighed heavily on sentiment and the currency. April inflation, reported last week, rose by 4.5% year-on-year from March’s 4.3%, within analyst expectations but above the BSP’s... Read More

Weekly Fixed Income Summary : April 23 – 27, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Eyeing a BSP Hike Outlook. We expect local bond yields to remain elevated as the market is somewhat unanimous in its reading of the Bangko Sentral ng Pilipinas’ (BSP) recent signal of its readiness to hike rates in its next policy meeting. Banks are predicting that the BSP will hike at least once and as soon as its meeting on... Read More

Weekly Fixed Income Summary : April 16 – 20, 2018

Weekly-Fixed-Income-Summary-and-Outlook
10-yr US Treasury Testing 3.0% Outlook. The local benchmark yield curve grew steeper last week from the prior week due to resurgent US Treasury (UST) yields amid a rally in oil and other commodity prices, fresh UST supply worth $96bn this week, and renewed higher inflation expectation in the US. All these ahead of the release of US 1Q18 GDP... Read More

Weekly Fixed Income Summary : April 02 – 06, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Rising Yield Curve Outlook. Bond yields will remain elevated amid (1) rising expectations of a hike by the Bangko Sentral ng Pilipinas (BSP); (2) steadily rising local inflation (up 4.3% in March, based on 2012 index); (3) allayed trade war fears by Chinese President Xi Jinping, shifting money out of safe haven assets like US Treasuries; and (4) Fed hike... Read More