SAT 29 MAY, 2021-theGBJournal- Bearish sentiments persisted in the Treasury bonds secondary market following liquidity constraints and investors’ expectations of higher yields across the NGN curve. Consequently, the average yield in the space expanded by 8bps to 12.5%.
Across the curve, average yield declined at the mid (-7bps) segment, driven by an improvement in bids for instruments at the segment. We note that investors interest here piqued on the NOV-2029 (-18bps) and JUL-2030 (-16bps) bonds.
Elsewhere, average yield expanded at the short (+37bps) and long (+3bps) ends, following sell-offs of the APR-2023 (+135bps) and APR-2037 (+21bps) bonds, respectively.
We maintain our view of higher bond yields in the short term, given the negative sentiments in the market. Nonetheless, we expect investors to cherry-pick long-dated bonds with attractive yields.
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