Bonds In Conversation : One Direction

one direction

Yes, they were in town and I am sure most Singaporeans would have noticed that more than the fact that the USDSGD broke its 4 year high again this week beacuse I noticed a few hundred thousand tweets about One D, my favourite boy band as well.

My view is that market upheaval we witnessed in this past week is nothing short of a pandemonium. In my years of experience, this has all the classic signs of headless chickens and gloating wolves, both caught up in the extreme ends of the spectrum of greed and fear, for them not to know what they want, need or what is going on.

We had the ECB embark on their first Q€ purchases this week and the result was a 2.2% depreciation in the EUR against the USD and surprise rate cuts, for forex markets to take centrestage.

Imagine headlines like this out of the BBC – US stocks higher on dollar fall.

“The Dow Jones added almost 260 points, or 1.5%, to end at 17,635.39, after a weaker dollar helped assuage the market’s fears of lower corporate profits and a sooner-than-expected interest rate rise.”

The stock market now moves on currencies ?

It is true. Because the WSJ has noted that coverage of forex movements are taking up more of economic news reporting these days.

FX COVERAGEWhat would you expect with 2 Asian central banks cutting rates in SURPRISE moves this week ? Korea and Thailand.

My opinion is that if you want to invest in credits or bonds or stocks, you better know what is happening in forex space now, more so than ever before.

Surprise moves are not desirable, it sends the panic button feeling and increases market discomfort, not knowing how to align expectations which have now all converged on the over riding one in ONE DIRECTION – USD.

And the one focal point it converges upon is the FOMC next week ! On the 19th morning in Singapore, at 2 am to be followed by a nice solar eclipse on Spring Equinox on the 20th.

People forget that the US may hit their debt ceiling on the 16th which to me can be circumvented if they borrow in EUROs ?? And watch their liabilities shrink as the EUR continues on its weekly 2% slide ?

All this hullabaloo in forex and stocks is giving investors some courage to go back into yield hunting mode and buying riskier assets especially with central banks are bent on easing.

Note that history has demonstrated that debt defaults in the EM coincides in periods of USD strength (mainly because USD liabilities are amplified). We shall see.


Singapore had a close call this week when the SGD, apparently, bursted out of its NEER on excessive weakness.

The USDSGD broke its 4 year high at 1.3908, a level not seen since July 2010, and 6M SOR fixed at a 5 year high of 1.13678 on 10 Mar.

Whilst the 3M SOR has come off under 1% (after a high of 1.0875% on 10 Mar), the SIBOR is inelastic and stubbornly holding its ground, fixing at a new high of 0.91309 today. Shame on the banks ! because the SOR fixings will probably be lower again today.

It has not dampened investor appetite for bonds with the 2 new issues this week seeing good demand in retail space. CWT and Q&M Dental issued papers that were all but taken up by private banks.

And lucky we are too as bond yields collapse around the world, that is the last thing on Singaporean’s minds as yields continue to rise onshore.


Singapore is going in the OPPOSITE DIRECTION to ONE DIRECTION !

Have a nice weekend.

Leaving with the indicative prices. The directory will also be updated this week because Bernie is back !!

USD Asian Bonds



SGD 2015 Corporates

SGD 2014 Corporates