Latest Singapore 6-month T-bill cut-off yield falls to 3.75%

THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) edged down to 3.75 per cent, according to auction results released by the Monetary Authority of Singapore on Thursday (Apr 11).

The previous auction, which closed on Mar 27, offered a 3.8 per cent yield.

Demand for the latest tranche increased, with the total amount applied rising to S$16 billion, from S$15.6 billion applied in the previous tranche. The total amount allotted at the latest auction stood at S$6.3 billion, representing a bid-to-cover ratio of 2.54.

Eugene Leow, senior rates strategist at DBS, said that expectations for higher-for-longer rates are building as the US has already released three months of elevated inflation figures this year. This has driven longer-term US dollar and Singdollar interest rates higher.

Still, he noted that short-term Singdollar rates are likely to stay broadly stable.

“Meaningful moves will likely only take place when the Fed adjusts its policy rates, something that does not look imminent,” he said.

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Six-month T-bill yields rose to a 30-year high of 4.4 per cent in December 2022, and have hovered mostly around 3.7 to 3.8 per cent since March 2023 amid the high interest rate environment.

Unexpectedly high US inflation figures released on Wednesday dampened hopes that the Federal Reserve will cut interest rates thrice, starting in June.

Instead, rates-futures markets appear to have priced in a quarter-point rate cut in September overnight, with just two rate cuts expected this year.