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November 22, 2017 | MANILA, PHILIPPINES
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   yield tracker
Date posted: Tuesday, May 02, 2017 | Manila, Philippines

Yields on gov’t debt mixed

YIELDS on government securities ended mixed last week amid geopolitical concerns and as details of the Trump administration’s tax reform plan remain elusive.

Bond yields decreased by 11.99 basis points (bps) on average week-on-week, data from the Philippine Dealing & Exchange Corp. as of April 27 showed.

Carlyn Therese X. Dulay, vice-president and head of institutional sales at Security Bank Corp., said government securities’ rates ended mixed “due to geopolitical concerns and external data including concerns on Korea, the French elections and the vagueness of US tax plans.”

US Treasury prices rose on Thursday, as investors sought the safety of bonds in the face of doubts about President Donald J. Trump’s unimpressive tax plan and persistent geopolitical tensions in North Korea and Syria.

Mr. Trump on Wednesday unveiled a one-page plan proposing deep tax cuts, many for businesses, that would make the federal deficit balloon if enacted, far short of comprehensive reforms both parties in Washington have sought for years.

Local trading volume was also limited ahead of the long weekend and the Treasury’s auction of fresh 10-year bonds today. Philippine financial markets were closed last April 28 and May 1 for the Association of Southeast Asian Nations Summit and Labor Day, respectively.

Yield movements in the secondary market last week were mixed. In the short end of the yield curve, rates of all Treasury bills (T-bills) rose week on week. The 91-day T-bill saw its rate go up 7.31 bps to end at 2.1231%. The 182-day papers also gained 25.06 bps to yield 2.6661%, while the 364-day T-bill saw its yield go up by 14.91 bps to fetch 2.9465%.

In the belly, yields were mostly down. The three-year Treasury bond (T-bond) lost 3.3 bps to fetch 4.0923%. The rate of the four-year bond also dropped 40.01 bps to 4.1517% and the five-year papers lost 2.26 bps to yield 4.2765%.

On the other hand, the two-year T-bond gained 97.83 bps to yield 4.4783% and the seven-year debt papers went up 11 bps to fetch 4.9261%.

Meanwhile, in the long end of the curve, the 10- and 20-year securities saw their yields go down by 6.86 bps and 2.83 bps, respectively, to 5.1618% and 5.0724%. -- JDMC with Reuters

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