T-Bills yields go up to 3.73% – Are interest rates starting to stabilise? (14 Sep 2023 Auction Results)



T-Bills auction results are out!

In my weekend article, I predicted a range of 3.65% – 3.75% on the T-Bills.

Surprisingly enough, T-Bills came in on the higher end of that range at 3.73%.

This is (a) very close to the yields on the previous auction and breaks the downtrend, while (b) demand is exactly the same as the previous auction.

Which raises an interesting question – are short term interest rates starting to stabilise at current levels?


T-Bills yields go up to 3.73% (14 Sep 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 3.73% yield (up from 3.70% the previous auction).

Charted in graph form below.

This breaks the downtrend from the past 5 T-Bills auction.

Yields are up *slightly* from the previous auction, but it’s on the lower end of the range for 2023.

Demand for T-Bills stabilised at $11.2 billion?

Interestingly, demand for T-Bills is flat from the previous auction.

At $11.2 billion, this is exactly in line with the demand from the previous auction.


In chart form below.

T-Bills application amount is exactly flat from the previous auction.

T-Bills yields are flat – tracking global interest rates

The flat T-Bills yields are pretty much in line with global interest rates.

MAS Bills (which predict T-Bill yield quite well) have been generally flat since the start of the month.

While the US 6 month Bills have been flat for the past 3 months (since June).

US markets are not pricing in any material change in US interest rates for the next 6 months.

Which as a sidenote is exactly why the sudden drop in Singapore T-Bills yields the past 5 auctions was so surprising – and point towards underlying liquidity factors rather than interest rate trend.

Are short term Interest Rates starting to stabilise around current levels?

Which raises an interesting question.

Are short term interest rates starting to stabilise?

You guys know what I mean.

For the past year or so, short term interest rates have been all over the place.

T-Bills yields went from as low as 0.5% in early 2022.

To as high as 4.4% in late 2022.

Which is an absolutely mind blowing move.

Of late though, T-Bills yields are starting to stabilise around the 3.7 – 3.8% range.

This does makes sense when you look at US interest rate pricing.

Showing only a 42% chance of another rate hike.

With interest rates likely to stay around current levels until May 2024 (implying a Fed pause for 8 months).

Given that these are 6 month T-Bills, with the market pricing in no changes in interest rate policy the next 8 months, it does make sense that T-Bills yields should start to stabilise at these levels for a while.

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

There are always questions on how do you know if you have been allotted T-Bills.

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, I break down the different scenarios below.

If you applied Non-Competitive Bid, you will get 100% allotment of whatever you applied for.

Ie. If you applied $10,000, you get $10,000 worth of T-Bills allotted.

If you applied Competitive Bid, then:

Full allotment if you applied below 3.73%

55% allotment (approximately) if you applied 3.73%

No allotment if you applied 3.74% and above.

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