Yield curve holds steady amid mixed sentiment

By First Capital Research

The week opened with mixed sentiment in the secondary market. 

Modest selling interest emerged in the 2028 and 2029 maturities, while the longer end, particularly the 2032s and 2033s, attracted selective buying. Despite the contrasting tone across segments, the yield curve held broadly steady.

At the short end of the curve, 15.02.2028, 15.03.2028 and 01.05.2028 traded between 8.75 percent to 8.80 percent. Amongst the 2029 maturities that were traded 15.06.2029 changed hands at 9.30 percent while 15.09.2029, 15.10.2029 and 15.12.2029 traded between 9.40 percent to 9.45 percent. 

Moving ahead, the 01.07.2032 maturity traded between 10.35 percent to 10.43 percent and finally, 01.06.2033 was seen trading at 10.60 percent.

In the forex market, the LKR depreciated against the greenback, closing at Rs.301.2/US dollar, compared to the previously seen rate of Rs.301.0/US dollar. Meanwhile, overnight liquidity in the banking system expanded to Rs.135.9 billion from the previously seen level of Rs.88.3 billion.