Yield curve witnesses mixed fortunes during the day
Friday, 26 September 2014 00:55
By Wealth Trust Securities
Activity in secondary bond markets continued to remain very high yesterday with the yield curve witnessing mixed fortunes during the day as yields on the belly end of the curve was seen increasing during the day while longer tenor yields were seen closing the day mostly unchanged in comparison to its previous day’s closing figures.
Yields on the two 2018s (i.e. 1 April 2018 and 15 August 2018) were seen closing the day higher at levels of 6.55/60 and 6.58/65 respectively against its previous day’s closing levels of 6.46/50 and 6.47/53 subsequent to hitting intraday highs of 6.62% and 6.65%. In addition, the 1 July 2019 was seen closing the day higher as well at levels of 6.65/70 in comparison to its previous day’s closing of 6.50/55 subsequent to hitting an intraday high of 6.70%.
However, yields on the 1 May 2021 and the 1 July 2022 were seen closing the day mostly unchanged at levels of 7.18/22 and 7.28/33 subsequent to hitting intraday highs of 7.30% and 7.42% respectively while yields on the two 2029s (i.e. 1 January 2029 and 1 May 2029) were seen closing the day lower at 8.65/75 subsequent to hitting an intraday low of 8.70%. In secondary bill markets, the 364 day bill was quoted at levels of 5.65/75.
In money markets, call money and repo rates were seen averaging 6.48% and 6.20% respectively as surplus liquidity continued to remain high at Rs. 39.63 billion yesterday. Interestingly, the surplus liquidity volume is expected to increase further today due to a term Repo maturity of Rs. 29.45 billion, as the OMO (Open Market Operations) department of Central Bank avoids conducting any term auctions in order to mop up liquidity.
Rupee dips once again
In dollar/rupee markets, the rupee was seen dipping to Rs. 130.35/40 yesterday against its previous day’s closing of Rs. 130.29/30 on the back of importer demand. The total USD/LKR traded volume for 24 September was at $ 146.29 million.
Some of the forward dollar rates that prevailed in the market were: one month – 130.80; three months – 131.43; and six months – 132.35.