Subdued sentiment persists; yield curve remains broadly unchanged

By First Capital Research

Building on the previous day’s sentiment, activity in the secondary market remained muted, resulting in low trading volumes. 

Consequently, the secondary market yield curve stayed largely stable.

Amongst the traded maturities, the 15.02.2028, 15.03.2028, 01.05.2028 and 15.10.2028 bond maturities traded within the rates of 9.87 percent to 10.05 percent. Furthermore, the 15.09.2029 maturity traded between the rates of 10.40 percent and 10.35 percent, whilst the 15.12.2029 maturity traded between 10.42 percent and 10.40 percent and finally, the 15.03.2035 maturity changed hands at 11.17 percent.

In the forex market, the Sri Lankan rupee showed signs of a subtle strengthening against the greenback for the second consecutive day, closing at Rs.299.62/US dollar, compared to the previous day’s rate of 299.66/US dollar. Additionally, the Sri Lankan rupee also appreciated against the other major currencies such as GBP, EUR, JPY and AUD. Meanwhile, overnight liquidity in the banking system registered an uptick for the nineth consecutive day, rising to Rs.168.9 billion, from Rs.144.5 billion in the prior session.