Latest Singapore 6-month T-bill offering 3.78% cut-off yield

SINGAPORE’S latest six-month Treasury bill (T-bill) is offering a cut-off yield of 3.78 per cent, according to auction results released by the Monetary Authority of Singapore (MAS) on Thursday (Mar 14).

This is slightly down from the 3.8 per cent that was offered in the previous auction, which closed on Feb 29.

Demand rose in the latest tranche. Auction results showed a total of S$14.4 billion in applications for the S$6.3 billion on offer, representing a bid-to-cover ratio of 2.29.

In the previous auction, applications totalled S$12.4 billion for the S$6.4 billion on offer.

The cut-off yield remains elevated even as demand metrics appear to have picked up, noted Eugene Leow, senior rates strategist at DBS.

He said there are jitters ahead of the US Federal Open Market Committee meeting next week, after US inflation figures proved sticky.

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Meanwhile, OCBC rates strategist Frances Cheung said the cut-off yield was on the high side of expectations.

One might have expected a bit more easing in the cut-off as money-market rates have fallen since the Feb 29 T-bill auction, she added. She expects demand to stay solid given continued deposit growth.

Around 96 per cent of non-competitive applications, totalling S$2.5 billion, were allotted in the latest auction.

Meanwhile, around 39 per cent of competitive applications at the cut-off yield were allotted. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not allotted.

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

But yields started to fall at the end of 2023, as the market expected the US Federal Reserve to cut interest rates, and hit a one-year low of 3.54 per cent in the Feb 1 auction.