📈 Bond Yields Decline as Bullish Momentum Persists

The secondary Bond market extended its rally yesterday, driven by strong demand and aggressive buying interest, particularly in medium to long-term maturities. • Market Activity & Yields: Yields continued their downward trend as traders targeted the 2029–2035 tenors to capitalize on the curve's steepness. • Short-to-Medium Tenors: 2027 maturities traded between 8.60%–8.68%, while 2028 bonds fluctuated between 9.00%–9.14%. • Long Tenors: Significant declines were seen in the 2032–2035 range, with the 15.06.35 maturity dropping to a range of 10.91%–10.83%. • Trading Volume: Total secondary market Treasury Bond/Bill transactions reached Rs. 58.63 Bn on February 3. • Currency & Forex: • The Rupee (LKR) remained stable, with spot contracts closing at Rs. 309.45/309.50 against the USD. • Total Forex traded volume stood at US$ 88.60 Mn for the day. The market shift toward longer tenors suggests investors are looking to lock in "carry and roll-down" potential amidst a declining interest rate environment, providing a boost to financial services and government debt pricing.