In my weekend article, I estimated a yield of 3.70% – 3.85% for the upcoming 6-month T-Bills auction.
Well, the auction results are out – 3.74%, towards the lower end of my projected range.
However T-Bills demand fell quite a bit to $14.4 billion (vs $16 billion the previous auction).
While auction amount increased to $6.6 billion (vs 6.3 billion the previous auction).
All while the market has moved to price in less interest rate cuts in 2024.
So the fact that T-Bills yields actually went down slightly (3.74% vs 3.75% the past auction) is interesting.
6-month T-Bills yields drop to 3.74% (25 April 2024 Auction Results)
I’ve extracted the cut-off yield for the latest T-Bills auction below.
This round of 6-month T-Bills are issued at 3.74% yield (a drop from 3.75% the previous auction).
This is charted in graph form below.
While T-Bills yields are well off the Feb lows, and comfortably back into the 2023 range.
You can also see how T-Bills yields have generally stabilised around the 3.7 – 3.8% range the past 5 auctions.
Demand for T-Bills drops to $14.4 billion (from $16.0 billion the last auction)
What is interesting is that demand for T-Bills dropped quite a bit.
We’re seeing only $14.4 billion in T-Bills applications, which is down 10% from the previous auction ($16.0 billion).
Charted below, you can see how T-Bills demand has come down quite a bit from recent highs – although it still remains much higher than the demand we saw in 2023.
As to why T-Bills demand tapered off, its not very clear.
Perhaps because it’s the end of the month, CPF-OA buyers prefer to wait for the next tranche.
Or perhaps the 1-year T-Bills auction just a