Selling pressure at short end pushes yields higher

By First Capital Research

The secondary market yield curve saw moderate trading volumes and mixed activity, with some selling pressure observed at the short end. 

As a result, yields at the shorter end of the curve edged higher.

Among the traded maturities, the 01.08.2026 and 01.05.2027 bonds were traded at yields of 8.20 percent and 8.70 percent, respectively. The 15.01.2028, 15.02.2028 and 15.03.2028 bond maturities were traded within a range of 8.95 percent to 9.02 percent, while the 01.05.2028, 01.07.2028, 15.10.2028 and 15.12.2028 bonds changed hands at the yields between 9.10 percent and 9.16 percent. 

Further along the curve, the 01.07.2030 maturity traded in the range of 9.70 percent to 9.72 percent, whereas the 01.10.2032 and 15.12.2032 changed hands between the rates 10.40 percent to 10.45 percent. Additionally, the 01.11.2033 and 15.09.2034 bonds were traded at yields of 10.75 percent and 10.80 percent, respectively.

On the external front, the Sri Lankan rupee appreciated against the US dollar, closing at Rs.302.5/US dollar, compared to Rs.302.6/US dollar recorded the previous day. Overnight liquidity in the banking system expanded to Rs.150.0 billion, from Rs.132.7 billion recorded the previous day.