Treasury bills rates seen picking up this week

Yields on Treasury bills or T-bills to be auctioned this week are expected to be range bound to slightly higher after the sharp drop in the past weeks as yields look to consolidate in the wake of the rise in US rates last Friday, October 5, 2024. (From the Facebook account of the bureau)

Yields on Treasury bills to be auctioned this week are expected to be range bound to slightly higher after the sharp drop in the past weeks as yields look to consolidate in the wake of the rise in US rates last Friday.

The Bureau of the Treasury (BTr) will auction off P20 billion in Treasury bills (T-bills) on Monday or P6.5 billion each in 91- and 182-day paper and P7 billion in 364-day debt paper.

“Reception for the T-bill auction this week is expected to remain robust despite the recent spike in US yields last Friday after the US nonfarm payrolls surprised to the upside,” Dino Angelo Aquino, vice president and head of fixed income at Security Bank Corp., told Inquirer.

READ: T-bill rates continue fall; Government raises P20 billion

The US nonfarm payrolls saw an increase of 254,000 jobs last month, the highest since March, according to the Labor Department’s Bureau of Labor Statistics. Economists polled by Reuters had projected a rise of 140,000 jobs, following a previously adjusted increase of 142,000 in August.

READ: T-bill rates end mixed

With this, the latest US job data suggests that the economy is strong and stable, making it unlikely for the US Federal Reserve to make significant policy rate cuts in the remainder of the year.

“For T-bills, it will likely be range bound to slightly higher after the huge drop the past two weeks,” Aquino added.

For Aquino, there’s still plenty of liquidity in the market, making T-bills a good option for parking cash. However, he noted that Treasury bond (T-bond) rates in the secondary market might go down this week following the increase in US yields last week.