Weekly recap: T-bill yield steady but SSB interest rates fall

Happy new year! 

We started 2024 by checking the latest fixed deposit rates, which indicated that most banks maintained or lowered their interest rates in January.

This may not come as too much of a surprise, as bond yields have been falling in recent months. 

Likewise, the latest Singapore Savings Bond (SSB) offers a lower interest rate compared to the previous issuance. 

Thankfully, the cut-off yield on the latest 6-month Singapore T-bill has remained steady at 3.74%. 

With the mixed interest rate signals, we’d be looking at the upcoming US inflation data to determine if the Fed might really cut interest rates soon.

🤔 WHAT'S THE FED'S NEXT RATE MOVE?

What happened? 

Minutes from the Federal Reserve’s December meeting suggest that circumstances might warrant keeping the interest rate at the current level longer than is anticipated. 

What does this mean?

Investors moderated expectations of an interest rate cut in March following the release of the minutes. 

According to the CME Fedwatch Tool, the probability of a Fed rate cut in March fell to 62% from 73% a week ago. 

Why should I care? 

US stocks fell for the first time in 10 weeks with lower expectations of a significant rate cut. 

At the same time, bond yields bounced with the US 10-year government bond yield rising to above 4% once again. 

To find out if the interest rate for the next SSB may be higher, check out our latest SSB interest rate projection.

💡 THE BIG IMPORTANT STORY

SSB 10-year return falls further to 2.81%. Still worth buying?

The latest Singapore Savings Bond (SSB) offers a 1-year return of 2.72% and a 10-year average return of 2.81%. We find out if it is still worthwhile applying for SSBs.

🚗 WHAT'S MOVING

• DBS has obtained regulatory approvals to increase its existing stake in Shenzhen Rural Commercial Bank. Following the approval, DBS’s stake is now at 16.7%, up from the 13% it first acquired in October 2023.
• Seatrium has won a contract by Shell to construct a deepwater new build project, following a letter of intent signed in August last year. Separately, Seatrium’s S$250 million wind farm contract was canceled by Empire Offshore Wind, a joint venture between Norwegian state-owned energy company Equinor and oil giant BP, due to “significant macroeconomic conditions” impacting the project. 
• Keppel REIT’s office building in Tokyo, KR Ginza II, has achieved full occupancy compared to 36.3% occupancy at acquisition, following the introduction of two new tenants at the start of 2024.
• The founder and CEO of NYSE-listed TDCX has made a non-binding proposal to take the company private at US$6.60 per share, a 37% premium to its closing price on 2 Jan.
• Apple’s share price fell after two brokers downgraded the stock due to concerns of lacklustre iPhone sales and weak sales in other hardware categories. 

Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore

🤝 A MESSAGE FROM OUR PARTNER

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🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 9 Jan: SIAS Corporate Connect with Singtel
• Thursday, 11 Jan: US Consumer Price Index (CPI) data
• Friday, 12 Jan: JP Morgan, Citi, Bank of America earnings

Source: Bloomberg, SGX 

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