The yield gap between Singaporeās 30-year government bonds and U.S. Treasuries has reached approximately 200 basis points, marking the largest gap ever recorded. This disparity is expected to widen further due to diverging debt supplies and the impact of U.S. fiscal policies under President Donald Trump, which may lead to increased Treasury yields [41942489].
As the U.S. prepares for potential fiscal changes, the 30-year Treasury yields have already approached 5% prior to Trump's inauguration. In contrast, Singapore's bond supply is constrained ahead of its upcoming auction scheduled for April 28, 2025. The last auction in September 2023 raised S$1.5 billion with a bid-to-cover ratio of 2.20, indicating strong demand despite the tightening supply [41942489].
The Monetary Authority of Singapore (MAS) is also expected to ease its monetary policy, which could further influence shorter-dated bonds in the market. Despite Singapore's government debt-to-GDP ratio nearing 180% in 2023, this figure does not raise immediate fiscal concerns, as the country maintains a robust economic position [41942489].
As investors navigate these developments, the implications of the widening yield gap will be closely monitored, particularly in the context of global financial markets and economic stability. Analysts suggest that the evolving dynamics between U.S. and Singaporean bonds could shape investment strategies moving forward [41942489].