Dear readers, the auction result of the latest 6-month Singapore Treasury Bill (T-Bill) was announced today: the cut-off yield of the T-bill is 3.73% per annum.
This has been a surprise to me because as shared in a previous post, I expect the cut-off yield of BS23125H to hover at 3.70% per annum given that cut-off rates of recent T-bills have ranged from 3.73% to 4.07% per annum and that recent average 10-year yields of Singapore Savings Bonds have come down.
BS23124Z, auction date: 7 Dec 23; cut-off yield of 3.74% per annum.
BS23123Z, auction date: 23 Nov 23; cut-off yield of 3.80% per annum.
BS23122F, auction date: 8 Nov 23; cut-off yield of 3.75% per annum.
BS23121A, auction date: 26 Oct 23; cut-off yield of 3.95% per annum.
BS23120A, auction date: 12 Oct 23; cut-off yield of 3.87% per annum.
BS23119H, auction date: 28 Sep 23; cut-off yield of 4.07% per annum.
BS23118F, auction date: 14 Sep 23; cut-off yield of 3.73% per annum.
The US Federal Reserves has signalled last week of a pause in rate hike and analysts have projected that interest rates are likely to come down next year.
Drawing parallels from the interest rate hikes, I view that the cut-off yield of 6-month T-bill is now at an inflection point since cut-off interest of BS23125H is almost identical to the previous tranche (BS23124Z). The cut-off interest of the 6-month T-bill, is likely to follow the same trajectory of interest rate, that is head lower for subsequent tranches of the T-bills.
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