Singapore Rates Weekly : A Little SOR-e


1M 0.18485
3M  0.2845
6M 0.41865


Apr CPI -0.6% MoM (exp -0.1%)
Apr CPI -0.5% YoY (exp 0%)
Apr Core CPI 0.4% (exp 0.7%)
1Q15 GDP 3.2% QoQ (exp 2%)
1Q15 GDP 2.6% YoY (exp 2.2%)
Apr Industrial Production -5.8% MoM (exp 1.1%)
Apr Industrial Production -8.7% YoY (exp -3.6%)

Bond prices lower on the week with the 10Y SGS auction tomorrow. We should see 2.43% (vs last week’s expectation of 2.36%) if everything remains status quo which is, of course, unlikely.

The long end 10Y sector saw an upward correction in yields although the reaction in the IRS was muted given that fixings have not changed much despite the SGD dollar weakening against the basket in the past week after the dismal CPI numbers yesterday.

MAS has come out to say that monetary policy stance remains unchanged so take heart, and do not panic and oversell the SGD although I was a trifle too optimistic last week that 1.34 would hold because I did not expect the volatility in the EUR, JPY and gang.

sgd weekly

I believe we shall continue to see consolidation on the interest rate front as far as SIBOR and SOR are concerned, and should not expect miracle rallies from our bonds as yet even as retail interest continues to grow as Fraser Centrepoint retail bond (the first retail bond we have seen in 3 years) started trading on the SGX at a premium over its OTC price.

Having said that, the 10Y SGS should bring some happy smiles if we get a long tail (2.5% ??). But given the sell off in the 10Y tenors with swaps not much changed, I would not hope too much and would not feel too sore about missing anything in such times.

Good luck !