THE cut-off yield on the latest Singapore six-month Treasury bill (T-bill) fell slightly to 3.74 per cent, according to auction results released by the Monetary Authority of Singapore on Thursday (Apr 25).

This compares with the 3.75 per cent offered in the previous six-month auction, which closed on Apr 11.

Demand was down in the latest tranche. The auction received a total of S$14.4 billion in applications for the S$6.6 billion on offer, representing a bid-to-cover ratio of 2.18.

Eugene Leow, senior rates strategist at DBS, noted that the cut-off on the six-month T-bills seems to be stabilising around the mid 3.70s.

“Market participants would be closely watching next week’s Fed meeting to get guidance on policy direction,” he said.

In comparison, the previous auction received S$16 billion in applications for the S$6.3 billion on offer.

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Around 96 per cent of non-competitive applications, totalling S$2.6 billion, were allocated.

As for competitive applications, around 21 per cent at the cut-off yield were allotted. Those who specified a lower yield were fully allotted, and those who specified a higher yield were not allotted.

T-bill yields hit a 30-year high of 4.4 per cent in December 2022, and have mostly hovered around the 3.7 to 3.8 per cent range since March 2023, amid the high-interest-rate environment.

While markets were initially looking forward to more rate cuts this year, they have since dialled back on expectations due to persistently high inflation figures in the US.