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Chart of the Day: SGS Bond Yield Curve

The SGS bond yield curve has adjusted higher in the wake of the improving US economy and risk appetite plus the recent US Treasury sell-off.

OCBC noted:

The maiden 30-year SGS bond auction size is $2.1b (with MAS taking $100m), and the tender will close on 28 March noon with issue on 2 April. This issue will mark the latest extension of the SGS bond yield curve which currently only has a 20-year tenor.

The issue size is also on the lower end of expectations between $2-2.5b, and should be well-absorbed, especially with the recent back-up in longer-dated bond yields.

Note in the past month alone, SGS bond yields have risen by around 17bps for the 20-year bucket and around 15bps for the 10-year bucket. This contrasts with 30-year swap rate which has retraced from its recent 3.35% high in mid-March to stabilize around 3.13% currently.

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