This month’s Singapore Savings Bond (SSB) for Sep 2022 issuance offers 2.8% average 10-year yield and 2.68% first year yield. Although the average 10-year yield is lower than last month’s SSB of 3.0%, the first year yield is actually higher, up from 2.0% last month.
Applications for August SSB last month saw super high demand. Total applied was $2.4B chasing after $700M worth of SSB offered. Despite the higher amount offered of $900M this month, I think demand will still be hot because of the higher short-term yields.
Since I started applying for SSB from July issuance, I’ve only been able to get $27K worth of SSB – $18K for July SSB and $9K for Aug SSB. So, I’ve applied for Sep SSB with the remainder $13K. However, I’m not optimistic to be fully allocated.
Oct SSB average 10-year yield might probably be even lower, since Singapore 10Y SGS yields have been on the downtrend since peaking in June 2022. See historical data here, screenshot below.
However, short-term yields might continue to be high relative to long-term yields since SGS yields are heavily influenced by US Treasury yields. The Treasury yield curve has been inverted since July 2022, which many believe to be a harbinger of recession. See the 10Y vs 2Y treasury yield spread here, screenshot below.
Hopefully the US Fed can engineer a soft landing and we don’t fall into a deep recession (shallow one should be fine). Anyway, I’m not in the business of predicting economic cycles. I just want to get my SSB fully allocated!
If long-term yields start increasing again, there’s always the option to redeem and re-apply for the new SSBs later on.
If you’re interested in applying for SSB, remember to do so by 26 Aug 2022.
See my previous posts on SSB:
- Why I Just Put S$40K Into Singapore Savings Bonds (SSB)
- Why Is Demand For Singapore Savings Bond (SSB) So High?
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