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Inverted Singapore bond yield curve adds to expectations for higher mortgage rates

Singapore Savings Bonds priced off the daily average yields of government bonds, but unlikely to track any yield curve inversions

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Tay Peck Gek

Tay Peck Gek

Published Mon, Jul 25, 2022 · 05:50 AM
    • The high cutoff yields in MAS bill issuances might be a sign that Singapore dollar liquidity is tight.
    • The high cutoff yields in MAS bill issuances might be a sign that Singapore dollar liquidity is tight. PHOTO: iStockphoto

    THE Singapore government securities yield curve has inverted, which means an increase in home mortgage rates and other borrowing costs pegged to short-term interest rates is not far off.

    On Jul 22, the yield on 10-year Singapore Government Securities (SGS) closed at 2.78 per cent — below the 2-year SGS yield of 2.84 per cent.

    Yields on the 2-year bond have been higher than yields on the 5-year bond since Singapore’s tightening of its monetary policy on Jul 14 — a day after the United States’ inflation rate hit a 40-year-high. But the relationship between 2-year and 10-year bonds is more closely watched.

    Singapore Savings BondsBondsMortgages

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