Rates: New Episode of Tension in the Short Term

The session on December 2 confirmed the ongoing trend in the market. For a demand of 5.42 billion DH, the Treasury issued 3 billion DH, exclusively for the 2-year maturity at a rate of 2.577%, which is an increase of 6.1 basis points compared to the last known reference. No other maturities were offered during this session. The previous week, on November 25, demand had reached 10.1 billion DH, with 4 billion DH allocated. The 2-year rate was then set at 2.516%, up by 4 basis points, while the 26-week rate was around 2.07%. According to AGR analysts, this trend is part of a rising movement observed since BAM's decision to maintain the status quo in September, with increases of 8 basis points on the 26-week and 4 basis points on the 2-year over recent weeks. The secondary curve also recorded increases of up to 12 basis points. AGR notes that demand for Treasury bills regularly exceeds 10 billion DH, with allocated amounts significantly lower. This situation arises as the Treasury has accelerated its issuance pace since at least October, conducting auctions between 4 and 7 billion DH per session to compensate for a low realization rate at the end of September. At the same time, institutional liquidity has contracted due to the return of private issuances (mainly private debts and OPCIs), which absorb part of the available resources. For bond managers, the recent rise is primarily seen as a temporary adjustment in liquidity within a market still capable of absorbing a monthly pace of 10 to 15 billion DH, or even more. They anticipate a gradual normalization of yields once liquidity stabilizes. However, AGR believes that the upward trend may continue until the end of the year, without undermining the observed shift on the curve in 2025, in a context of comfortable public finances and expected external financing of 60 billion DH. The Treasury has not yet announced its needs for December. At this stage, the adjustments observed in recent auctions mainly concern the short-term segment.