Singapore 6-month T-bill yield hits 1.7% at September auction
The cut-off yield for 6-month Singapore T-bills reached 1.7% on September 10. This marks the highest level in 2026, driven by falling demand and rising rate expectations.
The cut-off yield for 6-month Singapore T-bills rose to 1.7% at the September 10 auction. This is the highest rate recorded in 2026. The previous peak was 1.60% on August 27. The last time yields exceeded this level was in July 2025.
Total applications for the bill fell to S$16.6 billion. This is down from S$16.8 billion in the prior auction. Competitive bids dropped to S$15.2 billion. Non-competitive bids remained steady at S$1.4 billion.
Demand weakens as issuance shrinks
The government issued S$8.4 billion in T-bills. This amount is lower than the S$8.7 billion issued on August 27. The bid-to-cover ratio increased slightly to 1.97x from 1.93x. This indicates a tighter market for the new issuance.
Bidders submitted higher yields to secure allocations. The median yield of bids rose to 1.63%. The average yield increased to 1.56%. These figures were higher than the previous auction's 1.55% and 1.48% respectively.
Rate hike expectations drive pricing
Rising expectations of US Federal Reserve interest rate hikes influenced bidder behavior. Many bids landed in the 1.63% to 1.7% range. This suggests investors are demanding higher compensation for holding short-term debt. The cut-off yield reflects this increased cost of funds.
Allocation depends on bid level
Investors bidding below 1.7% received full allocation. Those bidding exactly at 1.7% received approximately 54% of their requested amount. All eligible non-competitive bids received 100% allocation. The source GN auto markets/bonds reported these specific auction outcomes.
