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10-year SGS price rises and yield falls 8% in two weeks, back to Feb levels

THE key 10-year Singapore Government Securities (SGS) has risen some 1.4 per cent in the past two weeks while the yield has fallen more than 8 per cent, tracking the US Treasury which is reacting to softer economic data.

The price of the 10-year SGS has shot up to 108.35 on April 14, a level not seen since February. On Feb 11, it was 108.39.

In the past two weeks, the yield of the 10-year SGS has declined to 2.02 per cent, down 8.2 per cent from 2.20 per cent on April 1.

Bond yields fall when prices rise, and vice versa.

The SGS has been moving in line with the US treasuries, said Kum Soek Ching, Credit Suisse head of Southeast Asia research, private banking & wealth management.

"US treasury yields have come off following underwhelming March US payrolls data and other macro data that signaled a slowing US economy," she said. "We expect modestly rising SGS yields towards the year end, in line with our expectation for a September US Fed rate hike."