Geopolitical escalations trigger selling pressure, lifting yields up

By First Capital Research

Amid the escalating tensions surrounding the US-Iran conflict, the selling pressure emerged in the secondary market as the investors adopted a cautious stance. 

Market reflected low trading volumes, whilst signalling selling pressure. 

The investor pessimism resulted in a broad-based increase in yields across the yield curve. 

Over the short-term, 15.02.2028, 15.03.2028, 01.05.2028 and 01.07.2028 traded within the range of 9.22 percent-9.39 percent. 

Moving ahead, 15.09.2029 and 01.03.2030 were dealt at 9.65 percent and 9.85 percent, respectively, while 01.06.2033 changed hands higher at 10.60 percent. 

Towards the long end, 15.06.2035 traded at 11.00 percent. 

On the external front, the Sri Lankan rupee depreciated against the US dollar, closing at Rs.311.34/US dollar, compared to Rs.310.90/US dollar recorded the previous day. 

Overnight liquidity in the banking system expanded to Rs.409.72 billion, from Rs.337.92 billion recorded previously.