Home Money Bonds: Average yields expands to 11.7% as demand for the short and...

Bonds: Average yields expands to 11.7% as demand for the short and mid dated instruments weakened

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SAT 10 JULY, 2021-theGBJournal- Bearish sentiments also returned to the bonds secondary market as demand for the short and mid dated instruments weakened. Specifically, average yields expanded by 8bps to 11.7%.

Across the benchmark curve, average yield expanded at the short (+4bps) and mid (+20bps) segments following sell-offs of the JAN-2026 (+25bps) and NOV-2029 (+27bps) bonds, respectively; while it pared at the long (-3bps) end following sustained buying interest in the APR-2037 (-13bps) bond.

On Wednesday, the DMO published the Q3-21 bond issuance calendar, which showed no changes in volumes offered. However, the short and mid dated instruments were changed to the FEB-2028 and MAR-2036 bonds, respectively (previously MAR-2027 and MAR-2035).

In the coming week, we maintain our expectations of lower yields as investors take positions ahead of the maturing JUL-2021 bond. Also, we expect the release of the June 2021 CPI (Cordros Forecast: 17.83%) to further shape market sentiments and the direction of yields.

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