Latest Singapore 1-year T-bill cut-off yield drops to 1.35%
Figure is down from the 1.68% offered in the auction for the previous one-year tranche in July
[SINGAPORE] The cut-off yield on the Republic’s latest one-year Treasury bill (T-bill) fell to 1.35 per cent, based on auction results released by the Monetary Authority of Singapore on Wednesday (Oct 15).
This was a drop from the 1.68 per cent offered in the previous one-year auction that closed on Jul 24.
The auction received a total of S$13.1 billion in applications for the S$5.8 billion on offer, representing a bid-to-cover ratio of 2.26.
In comparison, the previous auction received a total of S$11.3 billion in applications for the S$5.5 billion on offer, which worked out to 2.05 for the bid-to-cover ratio.
The median yield for the latest auction stood at 1.2 per cent, down from 1.6 per cent in the previous auction.
The average yield fell to 1.16 per cent, from 1.44 per cent previously.
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All non-competitive bids were allotted, amounting to S$361.7 million, while around 86 per cent of competitive applications at the cut-off yield were allotted.
DBS senior rates strategist Eugene Leow said that investors may not find the rates attractive from an absolute perspective with cut-offs less than 1.5 per cent. From a relative perspective, the cut-off for the one-year T-bill is even lower than the previous six-month cut-off, he noted.
“While this reflects Fed easing beyond six months, it does render the one-year relatively unattractive. Investors may prefer to roll shorter-tenor T-bills or take on a bit more risk to get higher returns,” he said.
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