Yields on 10-year treasury bonds fell to 17.748% from 17.859% at the last sale on 2 July, while 5-year yields were flat, rising marginally to 17.759% from 17.756% at the same auction, according to Central Bank of Egypt (CBE) data. The slightly lower yields followed the same pattern of yields on T-bills in Sunday’s auction, which saw larger falls in yields. The reversal of yield trends came after the Debt Management Office cancelled last week’s bond auctions, citing much elevated levels of yields as the reason. We continue to project yields to remain elevated in the next period as: i) prospects of lower policy rates continue to be limited amidst high oil prices; and ii) foreigners are still largely inactive as far as new foreign flows are concerned, amidst rising risk perception for emerging market assets.