SGD Rates and Bonds Weekly


Economic News

26 Mar
Feb Industrial Production -0.7% MoM vs expected -0.3%
Feb Industrial Production -16.6% YoY vs expected -7.9%
3 April
Mar Electronics Sector PMI 51.9 vs expected 52.5
Mar Purchasing Managers Index 50.6 vs expected 49.8

No real flows or interest in the market which is a sign of the new norm or perhaps consortiums at work. Economic numbers looking weak with the Feb Industrial Production coming out on the low end of the scale which is very telling of the new economic model for Singapore.

Market took the new 9 mth low in the 6M SOR in its stride with the 1Y irs failing to break the 0.36% before rebounding above 0.4% briefly. Activity for the rest of the curve centred on selling in the 5Y and 10Y irs to no challengers as local bank and his friendly parties continue to dominate the market. Thus just calm into the MAS monetary policy statement and 1Q flash GDP numbers next week before we get an inkling of what lies ahead.

Rates now below their 200 day moving averages and moving into filmsy support levels before the historic low abyss-zone of 2012. The strength of the inflows into ASEAN for Q1 has got the region worried for outflows to come and thus, perhaps, pose a new challenge for the central bank’s decision next week.

Suggest profit taking on shorts into MAS MPS and sitting into the event with a clear head.


Cyprus effect and yet SGS did not see the rally that matched UST or JGBs, probably because of the absence of POMO here.

Yet we saw a decent rally in the long ends, the 15Y SGS which caught the fancy of a local bank for it to be the best performer on the week, its yield falling 10 bp at one point before another local bank came out to take profit. It still remains the highest premium bond on the curve at 116 handle.

The 30Y SGS deserves special mention after its auction at 2.77% end Feb. The bond managed a credible rally to 2.7% while the new 5Y is holding the 0.5% level (auctioned at 0.57% last week).

The market is caught in a disconnect as the US stock market rally year to date pours cold water on the need for a safe haven hedge in SGS.

Probability of slightly higher prices going ahead without much conviction of a sustained rally.