Weekly recap: Interest rates continue to rise

At the start of every month, we would look out for the latest SSB and fixed deposit interest rates. 

We were pleased to see that the latest SSB offers a 10-year average interest rate of 3.32%, the highest so far this year. 

The best 6-month and 12-month fixed deposit rates have also been raised to 3.6%, closing the gap with Singapore T-bills. 

As US government bond yields continue to climb, we find out what this would mean for the upcoming 6-month T-bill auction on 12 October. 

With the higher interest rates, check out our Guide to investing in the T-bill and Guide to investing in the SSB to make your savings work harder. 

📈 BOND YIELDS SPIKE

What happened? 

US government bond yields rose further after US employment unexpectedly surged in September.

What does this mean?

The strong US labour market is driving investor expectations that the Federal Reserve may have to keep interest rates higher for longer. 

According to the CME Fedwatch tool, investors are now assigning an equal probability that the Fed will maintain or cut interest rates in June 2024. 

This means that the first Fed rate cut may happen later than current investor expectations. 

Why should I care? 

Oil prices fell with greater investor concerns that higher interest rates may lead to an economic slowdown. 

The Singapore stock market was also weak, driven by a sell-off in the REITs with worries that they may be impacted by higher borrowing costs.  

Check out our REIT ideas tool to compare REITs and find the best REIT for your portfolio. 

💡 THE BIG IMPORTANT STORY

Disney’s shares hit multi-year low. Has it lost its magic?

The share price of Disney has hit a multi-year low over the long term profitability concerns. 

🚗 WHAT'S MOVING

• Singapore Airlines (SIA) rebounded from its 3-month low with improved sentiment as oil prices retreated. Click here for SIA share price and analysis.
• Mapletree Logistics Trust fell by 8% and led losses amongst Singapore REITs as US government bond yields surged. Click here for MLT share price and analysis.
• Sembcorp Industries has signed a long-term power purchase agreement (PPA) with STT Telemedia Global Data Centres to power the latter’s data centres in Singapore. Under the PPAs, Sembcorp will supply up to 100 megawatts of power over 8 to 10 years. Click here for Sembcorp Industries share price and analysis.
• Vertex Technology Acquisition Corporation (VTAC) has proposed a business combination with 17LIVE, the operator of the largest live-streaming platform in Japan and Taiwan.  Click here for VTAC share price and analysis.
• Tesla (TSLA) cut the price of some Model 3 and Model Y vehicles in the US. The company also reported 435,059 deliveries for third quarter, below market forecasts for 461,640 deliveries. 

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

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 9 Oct: Singapore GDP data, MAS Monetary Policy Statement
• Tuesday, 10 Oct: SGX Academy webinar: What’s next for SPACs
• Wednesday, 11 Oct: SGX Academy webinar: Fundamental valuations for equities, SIAS-CapitaLand Ascott Trust Dialogue with Stapled Securityholders
• Thursday, 12 Oct: SIAS Webinar: Introduction to Combining Fundamental and Technical Analysis, Singapore 6-month T-bill auction, US CPI data
• Friday, 13 Oct: Citi and JPMorgan earnings

Source: Bloomberg, SGX 

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