The Fed’s rate cut caused significant moves in the fixed income market in September 2024. Despite the lower rates, Treasury yields have risen, suggesting that investors are anticipating further rate cuts but not as aggressively as initially predicted. Meanwhile, investment-grade corporate bonds have seen a surge in inflows, reflecting a growing appetite for perceived safer investments amid market uncertainty.
In regional sovereign bond markets Armenia and Georgia experienced slight reductions in yields, while the change in yield was more profound in Turkey. Meanwhile, a rather uniform dynamic was observed in Georgian corporate Eurobond market, with all Eurobonds experiencing a decline in yields.
Georgia money market
In Sep-24, GEL 239.5mn treasury notes and GEL 40mn treasury bills were sold. Notably, interest rates decreased on all instruments m/m (except for 6-month T-bills). The weighted average interest rate on 10-year notes was 8.658%, 5-year notes was 8.465%, on 2-year notes was 8.452%, on 1-year instrument was 7.738%, and it came in at 7.871% for 6-month instruments. Notably, non-residents’ treasury holdings increased by 4.0% m/m to GEL 319.2mn, following a sharp growth of 68.5% m/m in Aug-24 and the share of non-residents in total outstanding holdings came in at 3.5% (+0.1ppts m/m) in Sep-24.
