Yields Widened the Most in AAA Space
We saw yields continued moving upward in last week trading with the yields in AAA space widened the most as compared to other lower rated bonds. Yields in AAA space widened by an average of 14 bps WoW whilst AA and A rated bonds only rose by an average of 7bps WoW. However, yields in AAA space particularly medium (5-7 year) and medium tenured bonds (10 year) were seen rising higher, widening by 18 bps WoW and 12 bps WoW, respectively. Looking at the maturity curve, investors have been reducing their exposure in medium and long dated papers and shifting toward short term papers. This could be seen from i) yields have been rising the most in medium and long term papers than the short tenured ones and ii) daily trading activities were mostly dominated by short tenured bonds with heavier trading frequency.
