Regional Fixed Income Market Watch, October 2024

In Oct-24, global fixed income markets faced volatility due to US economic resilience and uncertainty over US post-election policy shifts. Treasury yields rose across the curve as the economic data (non-farm payrolls, jobs report, and consumer confidence) remained strong. Following the solid figures, expectations for deep rate cuts from Fed gradually faded. Market participants adjusting their expectations on future rate cuts resulted in 2-year  US treasury yield reaching 4.17% (+53bps) and the 10-year yield increasing to 4.29% (+50bps). 

In regional sovereign Eurobond markets Georgia and Turkey experienced  increase in yields, with the largest change in Georgia (+94.1bps). Uniform dynamic was observed in Georgian corporate Eurobond market - all Eurobonds experienced a rise in yields, with GRAIL posting the largest increase (+77.1bps).

Georgia money market 
In Oct-24, GEL 266.7mn treasury notes and GEL 40mn treasury bills were sold. Notably, interest rates decreased on all instruments m/m. The weighted average interest rate on 10-year notes was 8.385%, 5-year notes was 8.353%, on 2-year notes was 8.351%, on 1-year instrument was 7.695%, and it came in at 7.790% for 6-month instruments. Notably, non-residents’ treasury holdings decreased by 10.1% m/m to GEL 287.0mn, after a 4.0% m/m growth in Sep-24 and the share of non-residents in total outstanding holdings came in at 3.1% (-0.4ppts m/m) in Oct-24.