SINGAPORE RATES WEEKLY: SOR-RY FOR PARTY ROCKING

LMFAO- Party Rock Anthem

lmfaohttps://www.youtube.com/watch?v=KQ6zr6kCPj8

(A nice lesson at the start of the video that depicts the situation with the central banks out there – monkeys see, monkeys do)

I am not LMFAO about today’s Monetary Policy Statement where the MAS has deemed that “there will be no change to the slope and width of the policy band, and the level at which it is centred”.

USDSGD is 1 ct lower as a result, about 0.3-0.4% stronger against the pre-statement NEER basket, still -0.8% off the middle of the band and looking much better than last week’s -1.6%.

Look at interest rates this morning ! All coming off  8-10 bp and if this kept up, we should have the SOR fixing much lower tonight even if SIBOR REMAINS UNCHANGED and sticking to their 6 year highs – pity the MAS cannot do much about that.

This morning’s snapshot.

sgs table 3

1M LIBOR 0.1785%
3M LIBOR 0.277%
6M LIBOR 0.4044%

14/04/15

1Q15 GDP +1.1% QoQ vs exp 0.2%
1Q15 GDP +2.1% YoY vs exp 1.7%

I think we are there for the better part of it – the bond rally, I mean. 5 year bonds at 1.5% and10Y at 2%.

For example, 5 year rates have come off their highs in a big hurry, leaving us with little to cheer for when corporate bond prices are still in hibernation and SIBOR still at its highs.

We will probably spend the rest of the week consolidating and watching the fwds closely to get those SOR clues and market sentiments.

sgd 5y irs

Singapore 5 yr interest rate swaps

 

With the STI Index breaking its 7 year high this week and oil prices sticking at the support level of 50, I think I will be happy to with Singapore’s performance so far (i.e. enough for me).

SGS should be supported, I hope, given that there is only a mini auction this month for the obscure 2 year bond which means that we have little to fear and there will be bids for unwinding those positions.

I will not be too optimistic on the USDSGD in the week ahead because it will be carefully monitored. Besides, our next CPI number for Mar will only be announced on 23 April giving us plenty of time to pick our next buy level for the USDSGD which I personally set at somewhere under 1.35 and I daresay we can close the week under 1.36.

Good luck and PARTY ROCK and try shuffling (it’s not hard) !