Singapore's T-Bill Auction Results are Here!

In a surprising twist, the cut-off yield for Singapore's latest six-month Treasury bill (T-bill) has plummeted to 2.2%, as revealed by the Monetary Authority of Singapore on May 22. This marks the fifth consecutive decline since March 26 and sets a record low for the year!

Rising Demand Fuels Competitive Bidding

Investor enthusiasm surged during this latest auction, with applications soaring to an impressive S$18.1 billion against a modest S$7.5 billion on offer. This surge resulted in a bid-to-cover ratio of 2.41, outpacing the previous auction's ratio of 2.32 which had S$17.1 billion vying for S$7.4 billion.

Yield Metrics Show Decline

The median yield for this auction settled at 2.18%, a drop from 2.24% in the last round. Average yields followed suit, dipping slightly to 2.07% from 2.09%.

Expert Insights: A Relaxed Market?

Frances Cheung, head of foreign exchange and rates strategy at OCBC, remarked that a 2.2% cut-off yield surprised many and fell on the lower side of forecasts. She attributed the robust demand, indicated by the bid/cover ratio, to an influx of Singapore dollar liquidity and the high ratings of T-bills.

Turbulent Times Ahead?

Cheung also warned of the external volatility, especially with fluctuating US dollar rates that could influence Singapore's bond market. As we keep our eyes on upcoming US tax cuts and other markets, the overall sentiment in the bond environment will be crucial.

All Non-Competitive Bids Accepted

In a show of confidence, all non-competitive bids were fully allotted, remaining stable at S$1.5 billion from the previous auction. Additionally, around 59% of competitive applications were granted at the cut-off yield, a significant rise from just 23% previously.