SAT 08 MAY, 2021-theGBJournal- Trading in the Treasury bonds secondary market remained bearish as investors continue to anticipate further increases in FGN bond yields. Consequently, the average yield expanded by 44bps to 12.4%.
Across the benchmark curve, the average yield was higher at the short (+38bps), mid (+66bps) and long (+26bps) segments, following sell-offs of the MAR-2024 (+110bps), NOV-2029 (+68bps) and MAR-2035 (+64bps) bonds, respectively.
In the coming week, we expect investors to sustain sell-offs on Treasury bonds as we expect the negative sentiments in the market to persist. Thus, we maintain our view of higher bond yields in the short term.
Further into the month, we highlight that the release of key macro indicators will shape market sentiments and the direction of yields.
Such macroeconomic indicators include April 2021 CPI (Cordros Forecast: 18.75%), Q1-21 GDP (Cordros Forecast: +0.94%) and the MPC’s rate decision, which will be largely influenced by the outcome of the Q1-21 GDP number.