Adjudication in BDT: A Blank Session Before BAM's Final Meeting

During the session on December 9, the Treasury did not retain any amount, even though the total demand reached 4.39 billion MAD spread across several maturities, including 26 weeks, 52 weeks, 5 years, and 15 years. This situation contrasts with previous sessions where the Treasury was more active in the short-term segment, contributing to a rising trend in yields, particularly on the 2-year bonds, amid ongoing liquidity tensions in the institutional market. This lack of issuance occurs as the Treasury has yet to communicate its projected needs for December. Additionally, the upcoming final monetary policy meeting of BAM, scheduled for December 16, could influence market expectations. In this context, investors offered significant amounts across all proposed maturities, but no lines were served. This choice may reflect the Treasury's intention to allow pressure to ease in the short term before clarifying its needs and before BAM's decision. Furthermore, recent weeks have seen a notable increase in yields, primarily in the short term, driven by larger Treasury issuances between October and November and a tightening of liquidity, exacerbated by the dynamism of private issuances. However, bond managers continue to view these tensions as primarily cyclical, related to liquidity adjustments rather than a structural change in the market. A gradual normalization is expected once institutional liquidity is rebalanced. Regarding bond forecasts, experts from BKGR indicate that the Treasury continues to favor issuances in the short and medium term due to budgetary pressures, leading to a continued rise in rates in this part of the curve (noting that the 2-year yield has nearly returned to last year's level), which seems to gradually favor its flattening. At the long end, parties remain cautious as they approach the next Bank Al-Maghrib monetary policy council.