SGD RATES AND BONDS AFTER 3 WEEKS 031212
December 3, 2012 by Singrates
USD/SGD 1.2206 (-0.0020) approx 175 bp Above NEER (prev 175 ABOVE).
6M SOR 0.50856-0.55662%
SGS Inflow Outflow (-5/+5) : 0
Auctions
19 Nov SGS 3M bill SGD 2 bio (UNCH) cut off 0.19% (-1 bp)
26 Nov SGS 3M bill SGD 2 bio (UNCH) cut off 0.25% (+5 bp)
26 Nov SGS 6M bill SGD 2 bio (unch) cut off 0.28% ( +1 bp)
3 Dec SGS 3M bill SGD 2 bio (UNCH) cut off 0.22% (-3 bp)
15 Nov MAS 25 Day Bill SGD 1 bio (unch) cut off 0.20% (+2 bp)
15 Nov MAS 3M Bill SGD 2.4 bio (+400 mio) cut off 0.25% (+4 bp)
22 Nov MAS 28 Day Bill SGD 1 bio (unch) cut off 0.22% (+2 bp)
22 Nov MAS 3M Bill SGD 2.4 bio (unch) cut off 0.27% (+2 bp)
29 Nov MAS 28 Day Bill SGD 1 bio (unch) cut off 0.23% (+3 bp)
29 Nov MAS 3M Bill SGD 2.6 bio (+200 mio) cut off 0.27% (unch)
Economic Data
Sep Retail Sales +2.5% yoy exp +3.9 %. -0.5% mom exp +1.4% Singapore 3Q Final GDP -5.9% QoQ vs est -2.9%. +0.3% YoY vs est +0.9%.
Singapore Oct NODX +7.9% yoy exp +3.1% -1.2% mom exp -1.2% Electronics exports -0.8% exp -9.1% Singapore Oct CPI +4% YoY vs exp +4.5%. -0.2% MoM vs exp +0.2%.
Singapore Oct Ind Prod -2.1% YoY vs exp -0.7%. +3.3% MoM vs exp +5.4%
IRS : 3 weeks can be summed in a single line – quiet and sidelined markets. 3 weeks went past without much activity with rates in a blue funk as onshore sgd fwds saw a short squeeze to premium levels before correcting back to the negative territory. The USD/SGD tried to break the 1.23 without success and held 1.22 in the recent week. No real interest in the swaps in the absence of deal pricings or major flows. Rates barely changed in 3 weeks.
Comment : Year end lull or complacency ? That is the question. That the NEER has been sticking around this 175 bp is indicative of the central bank’s defence mechanism or just pricing in the lower probability of appreciation given the sliding CPI and expectations of economic slowdown ? The latter appears to be a plausible story given the spate of headlines on labour policies and an economic shift which bodes badly for rates as rates are inversely correlated to economic performance. I suspect position unwinds will come into play before long as parties exit the SGD curve and the plays for steep roll downs in the fwd fwd rates which will result in steepening in the 2 to 7Y sector.
SGS : 2 way flows in the bonds. Local banks buying the 10Y and 15Y was the highlight of the past 3 weeks. Month end was unusually quite as the index did not change much on the month. Profit taking heard in the street on the long ends. Whilst the 30Y bond price did not trade but saw a hefty correction due to its outperformance on the quarter. Yields closed -1 to +5 bp changed.
Comment : SGS not doing much as a mini corporate bond debacle grips the market. Olam dominating concerns which will lead to self defence mechanisms being activated to protect profits. Thus I am of the theory that we may see some AFS profits being booked before year end to stem losses.
Corporate Bonds
Wing Tai Properties Finance (unrated) SGD 170 mio 10Y 4.25% – SOR+250 bp
SGD RATES AND BONDS AFTER 3 WEEKS 031212
December 3, 2012 by Singrates
USD/SGD 1.2206 (-0.0020) approx 175 bp Above NEER (prev 175 ABOVE).
6M SOR 0.50856-0.55662%
SGS Inflow Outflow (-5/+5) : 0
Auctions
19 Nov SGS 3M bill SGD 2 bio (UNCH) cut off 0.19% (-1 bp)
26 Nov SGS 3M bill SGD 2 bio (UNCH) cut off 0.25% (+5 bp)
26 Nov SGS 6M bill SGD 2 bio (unch) cut off 0.28% ( +1 bp)
3 Dec SGS 3M bill SGD 2 bio (UNCH) cut off 0.22% (-3 bp)
15 Nov MAS 25 Day Bill SGD 1 bio (unch) cut off 0.20% (+2 bp)
15 Nov MAS 3M Bill SGD 2.4 bio (+400 mio) cut off 0.25% (+4 bp)
22 Nov MAS 28 Day Bill SGD 1 bio (unch) cut off 0.22% (+2 bp)
22 Nov MAS 3M Bill SGD 2.4 bio (unch) cut off 0.27% (+2 bp)
29 Nov MAS 28 Day Bill SGD 1 bio (unch) cut off 0.23% (+3 bp)
29 Nov MAS 3M Bill SGD 2.6 bio (+200 mio) cut off 0.27% (unch)
Economic Data
Sep Retail Sales +2.5% yoy exp +3.9 %. -0.5% mom exp +1.4% Singapore 3Q Final GDP -5.9% QoQ vs est -2.9%. +0.3% YoY vs est +0.9%.
Singapore Oct NODX +7.9% yoy exp +3.1% -1.2% mom exp -1.2% Electronics exports -0.8% exp -9.1% Singapore Oct CPI +4% YoY vs exp +4.5%. -0.2% MoM vs exp +0.2%.
Singapore Oct Ind Prod -2.1% YoY vs exp -0.7%. +3.3% MoM vs exp +5.4%
IRS : 3 weeks can be summed in a single line – quiet and sidelined markets. 3 weeks went past without much activity with rates in a blue funk as onshore sgd fwds saw a short squeeze to premium levels before correcting back to the negative territory. The USD/SGD tried to break the 1.23 without success and held 1.22 in the recent week. No real interest in the swaps in the absence of deal pricings or major flows. Rates barely changed in 3 weeks.
Comment : Year end lull or complacency ? That is the question. That the NEER has been sticking around this 175 bp is indicative of the central bank’s defence mechanism or just pricing in the lower probability of appreciation given the sliding CPI and expectations of economic slowdown ? The latter appears to be a plausible story given the spate of headlines on labour policies and an economic shift which bodes badly for rates as rates are inversely correlated to economic performance. I suspect position unwinds will come into play before long as parties exit the SGD curve and the plays for steep roll downs in the fwd fwd rates which will result in steepening in the 2 to 7Y sector.
SGS : 2 way flows in the bonds. Local banks buying the 10Y and 15Y was the highlight of the past 3 weeks. Month end was unusually quite as the index did not change much on the month. Profit taking heard in the street on the long ends. Whilst the 30Y bond price did not trade but saw a hefty correction due to its outperformance on the quarter. Yields closed -1 to +5 bp changed.
Comment : SGS not doing much as a mini corporate bond debacle grips the market. Olam dominating concerns which will lead to self defence mechanisms being activated to protect profits. Thus I am of the theory that we may see some AFS profits being booked before year end to stem losses.
Corporate Bonds
Wing Tai Properties Finance (unrated) SGD 170 mio 10Y 4.25% – SOR+250 bp
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Posted in basis swaps, Commentary, SGD NEER, SGS, SGS TBILLS, Sing Rates Editorial, Singapore Corporate Bonds, SINGAPORE GOVERNMENT BONDS, singapore interest rates, SOR FIXING, USD/SGD, WINGTAI PROPERTIES FINANCE WINGTA 4.25% 11/2022 | Leave a Comment
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