Singapore auction preview (26 April): SGS 20Y (Reopen) - ANZ

Irene Cheung, Research Analyst at ANZ, points out that the MAS will sell SGD0.8bn 20Y (reopen) SGS (via mini-auction) on Wednesday, 26 April and the demand at this auction will be primarily from onshore buy-to-hold institutional investors.

Key Quotes

“The external environment has turned more supportive to the SGS market. After the US Federal Reserve signalled at the March FOMC meeting that it would stick to a gradual tightening path, President Trump said that he preferred low interest rates. With US data also showing some softness lately, external headwinds will likely be less of a drag for SGS in the near term even though we expect the Fed to be on track to hike another two times this year.”

“On the domestic front, easy liquidity conditions will also be supportive. While foreign participation in long dated SGS is limited, a less vulnerable SGD will also aid sentiment. The MAS maintained a neutral S$NEER policy at its policy review on 13 April.”

“The issuance size of USD0.8bn should be absorbed but note that there will be more supply of duration in the scheduled 30Y auction in May.”