T-bill yield declines and REITs fall: Weekly Market Recap

This week, an interesting question popped up in the Beansprout Telegram group: Why are the prices of bond funds and REITs falling despite the Federal Reserve’s interest rate cut last month?

It’s a valid question since bond prices typically move inversely to yields, meaning that a rate cut should boost bond prices. 

However, to fully understand bond price movements, I usually focus on bond yields directly rather than simply following Fed announcements.

Bond markets are forward-looking, and bond yields had already fallen sharply earlier this year in anticipation of the Fed’s rate cuts. 

But recently, the US 10-year government bond yield rebounded from 3.6% in September to over 4.2%, as investors adjusted their expectations for future Fed rate cuts.

Interestingly, the cut-off yield for the latest 6-month Singapore T-bill has declined despite the bounce in US bond yields. We share why that might be the case here. 

Meanwhile, REITs have taken a hit, with distributions from blue-chip REITs like Mapletree Logistics Trust and Mapletree Pan Asia Commercial Trust falling, adding to investor concerns.

The takeaway for me here is that financial markets are always forward-looking, and we should adopt the same mindset—planning ahead and staying prepared for what’s to come.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

📈 US bond yields jump 

What happened? 

US Federal Reserve officials sounded a more cautious tone on sharp rate cuts, with an official saying that “We are not saying mission accomplished when it comes to inflation.” 

This led to a bounce in US government bond yields, with the 10-year U.S. government bond rising to above 4.20%, its highest level in three months. 

What does this mean?

Investors moderated their expectations for Federal Reserve interest rate cuts.

According to the CME Fedwatch Tool, investors are expecting that the Fed will cut interest rates by 1.25% through end-2025. 

This compares to expectations a month ago for interest rates to be cut by at least 1.75%.  

Why should I care? 

The S&P 500 fell after six consecutive weeks of gains with the increase in US government bond yields.

However, the Nasdaq rose with Tesla leading the gains, after the electric vehicle manufacturer reported posted unexpectedly strong quarterly earnings and projected 20% to 30% vehicle sales growth in 2025.

Chinese stocks bounced slightly as the central bank implemented more stimulus measures to support up the economy. We share 6 ETFs that offer exposure to the Chinese market. 

Singapore REITs fell with higher bond yields and weaker distributions announced, with losses led by Acrophyte Hospitality Trust (formerly ARA US Hospitality Property Trust), Mapletree Pan Asia Commercial Trust and OUE REIT. Read more about the latest updates on Singapore REITs in our REITs Weekly Wrap. 

🚗  Moving This Week

• Mapletree Pan Asia Commercial Trust 2Q25 DPU fell 11.6% to 1.98 cents, due to divestment of Mapletree Anson and weaker JPY and RMB. It recognized S$120m revaluation loss on 3 Japan assets, as the single tenant at Fujitsu Makuhari Building gave notice of non-renewal after Mar 26.
• OUE REIT 3Q24 net property income fell 3.7% to S$60.3m, due to lower hotel revenue and prior year’s property tax adjustment. Singapore office and retail saw high rental reversions and occupancy, while Shanghai remains weak.
• Frasers Centrepoint Trust 2H24 DPU of 6.02 cents is flat compared with 2H23 and 1H24. Net property income was 4.6% lower year-on-year due to divestment of Changi City Point and asset enhancement at Tampines 1.
• Digital Core REIT 9M24 distributable income rose 9.7% to US$34.5m. It backfilled 60% of the two L.A. properties, at 130% of the in-place rent from 1 Oct. About 40% of the leases have been renewed, at a positive 10.5% rental reversion.
• Suntec REIT 3Q24 DPU of 1.58 cents was 11.9% lower than 3Q23 due to absence of capital distribution. Stronger operating performance at Singapore and Melbourne offices was offset by weaker contributions from London and Adelaide. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The big important story

T-bill yield falls to 2.99%. Here's why it has declined

The cut-off yield on the latest Singapore T-bill auction on 24 October fell to 2.99%.

🤓 What we're looking out for next week

• Monday, 28 Oct: Mapletree Industrial Trust and CDL Hospitality Trust earnings
• Tuesday, 29 Oct: CapitaLand China Trust, CapitaLand Ascott Trust and Google earnings
• Wednesday, 30 Oct: Microsoft, Meta earnings
• Thursday, 31 Oct: Apple and Amazon earnings
• Friday, 1 Nov: US nonfarm payroll data

Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

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