📊 First Capital Research | Daily FI & UT Watch | 03 Nov 2025

📰 “Market Opens November on a Bearish Footing”

The month kicks off with mixed signals across the board. While October’s sluggish tone seems to have lifted slightly, the secondary market still reflects cautious optimism — yields have dropped 5–10 bps as investors tilt toward a buying stance. ⚖️📉

💵 Yield Curve Snapshot:

2028 Maturities:

15.03.2028 → 9.05%

01.05.2028 / 01.07.2028 / 15.09.2028 / 15.10.2028 → 9.10%–9.15%

2029 Bonds:

15.06.2029 / 15.09.2029 / 15.10.2029 → 9.50%–9.55%

Longer Tenors:

15.03.2031 → 10.00%

01.06.2033 / 01.11.2033 → 10.60%

01.07.2037 → 10.80%

📈 Trading volumes stayed moderate, but interest was seen across the curve, hinting at early repositioning ahead of policy expectations.

🌏 FX & Liquidity Update:

USD/LKR: Slight depreciation to 304.49 (vs 304.42 prior).

Banking System Liquidity: Contracted sharply to LKR 105.2Bn (from 155.1Bn).

💬 Analyst Take:

Despite the “bearish” label, the curve’s softening and steady activity suggest accumulation under the surface. Investors may be preparing for rate adjustments or macro easing ahead — but with liquidity tightening, near-term volatility remains in play. ⚠️💰

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