The next 6-month T-Bills auction is on 12 Sep 2024.
With the drop in T-Bills yields to 3.13%, I’m not so sure if I will still be buying though.
Given that the “breakeven” for CPF-OA is 2.9% once you factor in lost interest, at 3.13% the difference in interest earned is pretty small.
And for cash – T-Bills at 3.13% no longer offer a significantly higher interest rate than other cash options.
3 points I wanted to discuss.
What is the expected yield on the next 6-month T-Bills Auction? Any chance interest rates will go up? Will I still buy the 6-month T-Bills despite falling interest rates? What is the expected yield on the next 6-month T-Bills Auction? 6-month T-Bills yields continue their drop to 3.13% at the most recent auction
In the most recent T-Bills auction, cut-off yields continued their drop to 3.13%.
Charted below, this is the lowest yields we’ve seen over the past 18 months.
T-Bills application amount stabilises at $16.0 billion
Despite the sharp drop in interest rates, demand for T-Bills remains near record highs though.
$16.0 billion in T-Bills demand, flat vs the previous auction.
6-month T-Bills yields stabilise on the open market – trading at 3.12%
If you were hoping for a rebound in T-Bills interest rates.
It’s worth nothing that the 6-month T-Bills are trading at 3.12% on the open market.
But… T-Bill trading liquidity is very small (and therefore market yields are not that useful)
That being said – trading liquidity on the T-Bills is so thin that actually the market pricing is not that useful.
You’ll find that the market pricing actually takes its cue from the latest T-Bills auction, instead of the other way around.
So I
