Singapore’s robust SGD bond market is currently positioned favorably, offering investors an opportunity to secure stable income in the face of an increasingly hawkish global economic environment. 

The recent pause in US rate hikes has not diminished the attractiveness of high-quality SGD assets, especially against the backdrop of heightened inflationary pressures.

Key highlights from Eastspring Investments include the observation that the 10-year SGS yield reached a 16-year high of 3.47%, with six-month T-bills crossing the 4% mark for the first time since January. 

This surge in yields reflects the ongoing demand for SGD bonds, particularly from top-rated AAA sovereigns, amidst a relatively lower new issuance volume in the SGD corporate debt market.

Eastspring’s Fixed Income team anticipates continued investor demand for SGD bonds, citing their stability, relatively low volatility, and strong credit fundamentals. 

The team recommends capitalizing on the current elevated bond yields by investing in high-quality issuers, including SGD government bonds and investment-grade SGD corporate bonds. 

Recognizing the role of the advanced SGD bond market in providing income stability, Eastspring emphasizes the potential benefits for investors in the face of persistent inflationary pressures and potential economic slowdown.