T-bond yields hit new 14-month lows: Yields on T-bonds fell to their lowest levels since May 2018 in a bond auction last week as banks snapped up 3- and 7-year government bonds, CBE data (pdf) showed. Yields on 3-year bonds fell to 15.987% from 16.022%, while yields on 7-year notes fell to 15.943% from 16.016%. A later auction saw yields on 5-year bonds fall to 15.97% from 16.005%, and those on 10-year notes to 15.969% from 15.988%.

Are carry traders seeing an interest rate cut coming at the end of the year? Apparently not. Most expect interest rates to stay the same or be reduced by no more than 100 bps, government officials tell Al Mal, adding that investors are locking in the current yields. Investors have netted themselves a 23% return on EGP-denominated bonds this year — five times the emerging market average, helping Egypt maintain its position as one of the world’s best carry trades of the year.

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