In July 2024, global fixed income markets saw a decline in yields, underlined by monetary policies of Western central banks. While US Fed is expected to deliver the first rate cut in September, the ECB and Bank of England have already loosened their monetary policies. As a result, in Developed Markets, yields on most fixed income segments are now at 2024 lows. During past month, the US 2 and 10-year treasury yields have fallen by 52bps and 40bps, respectively. Meanwhile, 2 and 10-year German bund yields have lost 39bps and 26bps, respectively.
In regional sovereign bond markets Turkey, Georgia, and Armenia saw moderate decreases in yields, with Georgia experiencing the most profound change. Meanwhile, dynamics were mixed in Georgian corporate bond market, with TBC 8.894 PERP and GEBGG 9.5 PERP experiencing decline in yields and SILKNET 27 showing a slight rise.
Georgia money market
In Jul-24, GEL 231.6mn treasury notes and GEL 40mn treasury bills were sold. Notably, interest rates decreased on all instruments m/m (except 2-year benchmark bonds). The weighted average interest rate on 10-year notes was 9.798%, 5-year notes was 9.481%, on 2-year notes was 9.166%, on 1-year instrument was 7.852%, and it came in at 7.904% for 6-month instruments. Notably, non-residents’ treasury holdings decreased by 11.5 % m/m to GEL 182.1mn (-19.3% m/m in Jun-24) and the share of non-residents in total outstanding holdings came in at 2.1% (-0.3ppts m/m) in Jul-24.
