HALISTER1: Singapore’s 2-Year Bond Auction to Draw ‘Robust’ Demand: ANZ

Singapore’s 2-Year Bond Auction to Draw ‘Robust’ Demand: ANZ

(Bloomberg) -- Singapore’s auction of S$2.6b ($1.9b) in reopened 2-year govt bonds on March 29 will probably draw a “robust” bid-to-cover ratio of around 1.5-2.0, ANZ writes in report today.
  • With a S$7.3b maturity on April 1, local banks will likely need to replenish those maturing funds into the 2-year note: ANZ; expects a cut-off yield of 1.02% at the auction, based on current yield curve
  • Given its view on SGD, SGS yields, and valuations, however, ANZ doesn’t expect this bond to perform well post auction; adds 2-year notes are trading slightly rich vs swaps, citing wider swap spread than historical avg
  • ANZ’s FX strategy team doesn’t expect strength in SGD to be sustained
  • NOTE: Singapore’s 2-year yield slips 4 bps to 0.89% in secondary market today; SGD falls 0.4% to 1.3646 per USD
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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