Singapore’s Region-Lagging Bonds Face Little Near-Term Relief

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Singapore government bonds have been the worst performing in Southeast Asia this year, with a loss of over 4%. The upcoming policy review by the Monetary Authority of Singapore (MAS) is unlikely to provide much relief, given sticky inflation and solid economic data. MAS uses the local dollar as its main policy tool, meaning bonds are often driven by moves in overseas markets. Singapore bonds find themselves caught between a rock and a hard place, given their strong link to the US market. Local yields tend to follow any move in their Treasury counterparts higher but are unlikely to drop as much as many regional peers when the cutting cycle begins. The MAS is not expected to change its policy until October, unless Singapore inflation declines more than expected in the coming months. The US Federal Reserve is expected to make three rate cuts in 2024. The rate of core inflation in Singapore accelerated to a seven-month high in February. The MAS will stay on hold in April, and Singapore yields still take cues from USD rates.

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https://finance.yahoo.com/news/singapore-region-lagging-bonds-face-004001782.html