Strong Government Borrowing Appetite [February 4- February 8, 2019]

Weekly-Fixed-Income-Summary-and-Outlook
The Bulls Are Back Outlook. Last week, the market bought on better-than-expected inflation news but was wary on a rumored possible retail treasury bond (RTB) issuance. We expect the market to remain cautious of this, causing the yield curve to be rangebound on heightened risk aversion anew to long duration and a preference for the safety of the short but... Read More

Weekly Fixed Income Summary : January 14 – January 18, 2019

Weekly-Fixed-Income-Summary-and-Outlook
Bulls Hunt For Yields Outlook. Yields continued to drop amid strong demand that ate up the influx of fresh supply. Local investors are locking in and chasing yields at the possibility of further interest rate drops. In a BSP survey conducted recently, analysts and economists expect inflation to decelerate to 4.1%, lower than the previous estimate of 4.3% but higher... Read More

Weekly Fixed Income Summary : January 7 – January 11, 2019

Weekly-Fixed-Income-Summary-and-Outlook
Fed in Wait-and-See Mode Outlook. The yield curve continued to drop on the release of a decidedly dovish tone of the Fed’s December meeting minutes and a moderate US inflation outlook. Despite raising its rates for the fourth time in 2018 last December, Fed officials indicated that it “could afford to be patient” with future rate hikes with inflation still... Read More

Weekly Fixed Income Summary : December 31 – January 04, 2019

Weekly-Fixed-Income-Summary-and-Outlook
Yield Curve Mildly Down Outlook. Despite the influx of fresh supply, the yield curve instead trended down, giving a strong indication that the lower inflation outlook weighed more on market sentiment. The government has a programmed borrowing of Php1.2tn this year, 20% higher than 2018’s to fund its infrastructure program, with Php360bn scheduled for the first quarter or Php30bn more... Read More

Weekly Fixed Income Summary : November 26 – November 29, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Yield Curve Downshift Outlook. The Bangko Sentral ng Pilipinas (BSP) expects November inflation to settle within 5.8%-6.6%, starkly lower than October’s 6.7% due to the sharp decline in global oil prices, normalization of rice supply conditions, and peso appreciation. Since its peak its peak last October, global oil prices have gone down by as much as 33% while local gasoline... Read More

Weekly Fixed Income Summary : November 19 – November 23, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Hike Pause Outlook. We believe that the BSP is done hiking for the year especially with the Fed’s recent dovish tone and the expected easing of local inflation for the rest of the year and in 2019.The central bank’s most recent 25bps last week brought the policy rate (RRP) to 4.75% and the total hike to 175bps this year and... Read More

Weekly Fixed Income Summary : November 12 – November 16, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Dovish Fed? Outlook. The Bangko Sentral ng Pilipinas (BSP) hiked rates by another 25bps last week, a move that was widely expected and brought the policy rate (RRP) to 4.75% and the total hike to 175bps this year. Though inflation was believed to have peaked in the third quarter this year, the hike was deemed a proactive move to stump... Read More

Weekly Fixed Income Summary : November 5 – November 8, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Yields Drop on GDP Shortfall Outlook. We expect bond yields to be rangebound this week as the market digests the economic data released last week and as it looks towards the Bangko Sentral’s (BSP) monetary board for direction, who will meet this Thursday. GDP for the past quarter clocked in at 6.1%, slower than the upwardly-revised GDP figure of 6.2%... Read More

Weekly Fixed Income Summary : October 29 – October 31, 2018

Weekly-Fixed-Income-Summary-and-Outlook
Wait-and-See Outlook. October inflation clocked in at 6.7%, unchanged from September and higher than the Department of Finance’s forecast of 6.5% but within the Bangko Sentral’s forecast range of 6.2%-7.0%. This brought the year-to-date (YTD) figure to 5.1% from 5.0%. Both BSP and DOF’s inflation outlook turned optimistic on stabilizing rice prices, power, and lower oil prices in the crude... Read More

Weekly Fixed Income Summary : October 22 – October 26, 2018

Weekly-Fixed-Income-Summary-and-Outlook
One More BSP Hike? Outlook. Hawkish signals from the Bangko Sentral ng Pilipinas (BSP) add upward pressure on bond yields that are already at decade highs. After returning from a five-week leave last week, BSP Governor Espenilla hinted that the next monetary board meeting will determine whether there’s a need for a final hike before the end of the year... Read More