What happened?
The cut-off yield for the latest 6-month T-bill auction (BS23106N) on 30 March 2023 rose to 3.85% p.a. This provided some relief to investors, especially after the sharp decline in yields we saw in the previous auction. Let’s take a look and find out what drove the recovery in bond yields in the latest Singapore 6-month T-bill auction. <img src="https://growbeansprout.com/strapi-uploads/image_1e1cdfc0b2.png" alt="Table Description automatically generated">
Source: MAS
What we learnt from the latest T-bill auction
#1 – Total amount of applications for T-bills fell sharply
The total amount of applications for the latest T-bill was at S$9.6 billion, falling from S$12.7 billion in the previous auction. It would appear that the demand for T-bills has not gone up even as banks have started to cut their fixed deposit rates in recent weeks. Applications fell for both competitive and non-competitive bids. The total amount of competitive bids fell to S$9.1...
