What happened?

Many T-bill investors were happy to see the latest auction result. The cut-off yield for the latest 6-month T-bill auction (BS23123Z) rose to 3.8% from 3.75% in the previous auction. This might have come as a surprise to many, as global bond yields have been falling in recent weeks.  Let us find out what is driving the bounce in the cut-off yield in the latest 6-month Singapore T-bill auction. Source: MAS

What we learnt from the latest Singapore T-bill auction

#1 – Demand falls slightly compared to previous issuance

The total amount of T-bill applications fell slightly compared to the previous auction.  There were S$13.0 billion of applications for the latest 6-month T-bill, lower than the S$13.2 billion of applications in the previous auction. The amount of competitive bids remains elevated at S$10.8 billion, unchanged from the previous auction. However, the amount of non-competitive bids fell to...