📉 Bond Market Yields Spike Ahead of Rs. 140 Bn T-Bill Auction

The secondary bond market turned bearish for a second consecutive day, with yields climbing due to selling pressure and global market trends. Defensive trading was driven by geopolitical uncertainties in the Middle East and elevated crude oil prices, though healthy volumes were maintained via block transactions. Key Market Highlights: • Bond Yield Movements: Short-term: 01.08.26 maturity traded at 8.25%. Medium-term: 2028 maturities hit 9.95%–10.00%, while 2029 maturities moved up to 10.05%–10.30%. Long-term: 2034–2036 maturities saw elevated yields ranging between 11.32% and 11.48%. • Upcoming T-Bill Auction: The Central Bank will offer Rs. 140.00 Bn today (Rs. 65.00 Bn for 91-day, Rs. 40.00 Bn for 182-day, and Rs. 35.00 Bn for 364-day tenors). This is lower than the estimated maturing volume of Rs. 162.00 Bn. In the previous auction, yields had declined across all tenors for the first time in 10 weeks, with the 91-day average at 8.13%. • Money Market Liquidity: Net liquidity surplus stood strong at Rs. 181.68 Bn. Overnight call money and repo rates averaged 7.84% and 7.89% respectively, while the CBSL drained Rs. 75.00 Bn via an overnight repo auction at 7.74%. • Forex Market: The USD/LKR spot contracts traded in a range of Rs. 327.85 to Rs. 328.90. Total traded volume stood at US$ 76.25 Mn.