6-month T-Bills yields drop to 3.87% – Huge increase in T-Bills demand! No full allotment for non-competitive bids (12 Oct 2023 Auction Results)



T-Bills auction results are out!

After the previous round of T-Bills auction closed at 4.07%, we all knew that demand would go up.

And boy… did demand go up indeed.

Soaring 58% to 14.7 billion ($9.3 billion the previous auction).

That’s the highest demand for T-Bills in all of 2023 (and 2022 as well).


On the bright side though, T-Bills yields didn’t drop all that much.

Down to 3.87%, which is still somewhat respectable, especially given the huge jump in T-Bills demand.

But given the high demand, non-competitive bidders won’t get full allotment – only 79% allotment.

Quite a lot to digest, so let’s dive in.

6-month T-Bills yields jump to 3.87% (12 Oct 2023 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 3.87% yield (a drop from 4.07% the previous auction).

Charted in graph form below.

Cut-off yields are down as you would expect given the sharp rise in demand.

But all things considered, it’s not too bad, and close to the 2023 highs.

Demand for T-Bills soars to $14.7 billion?

I said in my weekend article that demand for T-Bills is bound to increase this auction.

The only question is how much does it go up by.

And boy… did demand go up.

From $9.3 billion the previous auction, to $14.7 billion this auction.

That’s a humongous 58% increase in T-Bills application amounts.

In chart form below.

This is the highest T-Bills demand we have seen the past 12 months, ever since T-Bills starting getting attractive.

Crazy stuff.

But… not that many lowballers? Spread between median and average yield

The spread between the median and average yield tells you how many “low-baller” bids there were.

To illustrate what this is:

Imagine you have 100 bids.

The median yield, is if you arrange all the bids from small to high, and take the yield of the 50th bid.

While average yield, is adding up the yields of all 100 bids and dividing by 100.

So average yields are skewed by lowball bids, while median yields are not.

To put it simply – the bigger the spread between the median yield and average yield, the more “low-ballers”.

At the previous auction recent auction, this spread between the median yield and average yield was even lower than the lows hit in Dec 2022 (where yields shot up to 4.4%).

This meant very few “low-ballers”.

This time around, the spread went up slightly, but nothing too crazy.

In plain English – this means that while demand for T-Bills soared, investors were somewhat rational in their bids.

Nothing crazy like bidding 1.0% just to ensure you get an allotment.

No full allotment for Non-Competitive Bids! 

Note that this is the first time in a while that non-competitive bids don’t get full allotment.

If you applied Non-Competitive Bid, you will get 79% allotment of whatever you applied for.

Ie. If you applied $100,000, you get $79,000 worth of T-Bills allotted.

If you applied Competitive Bid, then:

Full allotment if you applied below 3.87%

68% allotment (approximately) if you applied 3.87%

No allotment if you applied 3.88% and above.

How do you know if you have been allotted T-Bills?

If you forgot what you bid, the easiest way is to check if you have any refund from your bank tonight.

Some banks like OCBC will also issue you a confirmation note (but DBS doesn’t).

Otherwise, you have to wait until the T-Bills are issued and check your CDP Statement.

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  1. Hi FH competitive bid 100%allotment. Have been doing non competitive bids but Should I now always do a competitive bid?
    Is there a downside to doing a competitive bid if you bid low? Thank you

    • No downside – but if enough people submit lowball competitive bids, then the cut-off yield will be low. And because your competitive bid is low, you will be alloted even if the cut-off yield is low.

      So there is a bit of game theory here on how you want to play it.


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