SGD Rates and Bonds Weekly


Economic News
2Q Unemployment Rate 2.1% vs previous 1.9%
Jun Bank Loans and Advances +17.7% YoY vs previous +18.8%
Jul Electronics Sector Index 50.3 vs expected 51.0
Jul PMI 51.8 vs expected 51.3


The unemployment rate drove the USDSGD up early in the month but renewed confidence in a US slowdown after the NFP gave EM and SG a boost. To rally on bad news and economic slowdown, Asian style.

Intraweek, we saw higher rates into last Friday across the board by some 7-8 bp before crashing lower post NFP on thin trading ahead of this week’s long weekend. 6M SOR remained well under wraps fixing at its lows.

It does look like rates will remain in limbo for the time being and enjoy some relief from the long weekend that starts after tomorrow. The near term risk would still be to position on the steepening trend we have witnessed in the last 2 months.

I would not be too optimistic to hope for the return of QE days, suffice that a relief rally could be in store as evidenced in the SGD-USD 5y5y spread widening.

From the 6M fwd fwd charts, the 7-10 still has the dip whilst the 5-7 looks a trifle steep.



Good flows in the market with real money re-entering the market and picking up some long end bonds into NFP and month end duration extensions. With 20Y and 30Y yields at 3.2% and 3.3%, market saw renewed support.

The rally after the NPF was well timed for a decent profit. The absence of a proper trend would call for caution as we head into the 20Y auction for month end. Would look for USDSGD and the EM basket for direction in the near term and the SGD NEER’s strength before next week’s GDP release.

It does not make sense to be over exuberent on bonds at the moment. Profits should be taken off the table where and when there is any.