With the 10-year yield of Singapore Government Securities ending at 2.27% on May 6, and the lowest level year-to-date, the liquidity in the local system should be able to drive the Straits Times Index towards 4,000 sooner rather than later. The STI closed at 3,934 during the week of June 2-6. Technical indicators continue to support modestly higher levels, with the medium and long-term moving averages remaining in rising mode, and quarterly momentum inching above its equilibrium line.
The latest 6-month T-bill auction on May 5 yielded 2.05%. Although the Astrea bonds provide better yields, their yield to maturity tightened as bond prices rose.
