Latest Singapore 6-month T-bill offers cut-off yield of 3.66%

THE cut-off yield on Singapore’s newest six-month Treasury payments (T-bills) rose to three.66 per cent, in keeping with public sale outcomes launched by the Monetary Authority of Singapore on Thursday (Feb 15).

This was in comparison with the cut-off yield of three.54 per cent supplied within the earlier six-month public sale, which closed on Feb 1.

Demand is down within the newest public sale for the T-bills. The payments obtained a complete of S$13.5 billion in functions for the S$6.6 billion on supply, representing a bid-to-cover ratio of two.05.

In comparability, the earlier six-month tranche obtained S$14.6 billion in functions for the S$6.3 billion on supply.

Eugene Leow, senior charges strategist at DBS, famous that the upper cut-off is probably going in response to very agency information from the US.

“Between higher-than-expected inflation and stronger-than-expected payrolls, investors are mulling a no-landing scenario where the Federal Reserve cuts later in the cycle,” he stated.

OCBC charges strategist Frances Cheung stated the 12-basis-point improve within the cut-off was not out of line with the market, and was doubtless a results of the latest hawkish repricing of the Fed coverage fee outlook.

Nevertheless, the anticipated route of rates of interest transfer stays a downward one, she added.

Meanwhile, demand within the newest public sale was nonetheless first rate when put next with the earlier two rounds, which had been overwhelming, Cheung famous.

Non-competitive functions totalled S$2 billion and had been totally allotted within the newest public sale.

Around 87 per cent of aggressive functions on the cut-off yield had been allotted. Those who specified a decrease yield had been totally allotted, and people who specified the next yield weren’t allotted.

Yield on the T-bills hit a 30-year excessive of 4.4 per cent in December 2022, and has hovered principally across the 3.7 to three.8 per cent vary since March 2023.

But amid expectations of rate of interest cuts in 2024, yields on the T-bills have fallen in latest issuances, right down to a low of three.54 per cent within the Feb 1 tranche.