Philip Curve Steepens, Spreads Tightens, CPI Later This Week

The Philippines USD sovereign debt curve has bear-steepened on Tuesday, with yields are 4-6bp higher. Central Banks expects Inflations to range from 3.4% to 4.2%.

• The PHILIP curve has bear-steepened on Tuesday, however has out-performing the move by US treasuries, the 2Y yield is 4bps higher at 4.855%, 5Y yield is 5bps higher at 4.975%, the 10Y yield is 6bp lower at 5.06%, while 5yr CDS is 0.5bp higher at 63.5bps.
• The PHILIP to UST spread difference tighten in the front-end throughout the day as the US treasury yields moved higher post ISM data, the 2y is 14.5bps (-3.5bps), the 5yr is 66.5bps (-3bp), while the 10yr is 75bps (-2bps)
• Cross-asset moves: USD/PHP is 0.17 higher at 56.355, the PSEi is 1.02% higher, while US Tsys yields have steepened with yields 0.5bp higher to 1.5bps lower.
• The Bangko Sentral ng Pilipinas predicts Philippine inflation for last month to range from 3.4% to 4.2%, compared to February's 3.4%. Rising prices of rice, meat, domestic oil, and electricity are driving upward pressures, while lower prices of fruits, vegetables, fish, and a stronger peso may counterbalance. The central bank pledges to monitor inflation and growth closely for future policy decisions.
• Looking Ahead: CPI is due out on Friday