SAT 04 DEC, 2021-theGBJournal- Proceedings in the Treasury bonds secondary market closed the week on a mixed note, as investors remained on the sidelines but continued to cherry-pick instruments across the curve.
The average yield was unchanged 11.4%. Across the benchmark curve, the average yield expanded at the short (+23bps) end as investors sold off the JAN-2022 bond, but declined at the mid (-14bps) and long (-1bp) segments following improved demand for the JUL-2030 (-17bps) and MAR-2035 (-8bps) bonds, respectively.
In the short term, we expect yields to oscillate around current levels, driven by thin maturities and deliberate efforts by the DMO to reduce domestic borrowing costs for the government.
Also, we expect non-bank liquidity to be geared towards relatively higher non-sovereign instruments, thus tempering demand.
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