Early-week selling pressure pushes yield curve upward

By First Capital Research

The week commenced with broad-based selling pressure across all the maturities in the secondary market, amidst limited market activity and low volumes. 

The yield curve shifted upwards, following the rise in yields. Over the short-term, 01.07.2028 and 15.12.2028 traded at 9.25 percent and 9.30 percent, respectively. Moving ahead, 15.12.2029 traded within a narrow range of 9.65 percent-9.66 percent, while 01.03.2030 was seen trading between 9.70 percent and 9.75 percent. Further at mid-tenure, 15.03.2031, 01.10.2032, 15.06.2034 and 15.09.2034 changed hands at 9.90 percent, 10.30 percent, 10.78 percent and 10.82 percent, respectively. Finally, the long-dated 15.08.2036 maturity was dealt at 10.87 percent. On the external front, the Sri Lankan slightly depreciated against the US dollar, closing at Rs.311.13/US dollar, compared to Rs.311.07/US dollar recorded the previous day. Liquidity in the banking system contracted to Rs.335.5 billion, from Rs.406.8 billion recorded previously.