SINGAPORE: Singapore’s bonds became the world’s highest-yielding AAA ranked government debt securities, surpassing Australia’s.
Ten-year notes in the island-state yielded 2.481 percent as of 2:43 p.m. local time, versus 2.479 percent in Australia. The difference was about four basis points earlier in Asian trading. The inversion is the first since 1998, according to data compiled by Bloomberg.
The central banks of Singapore and Australia both eased monetary policy this year. The Monetary Authority of Singapore, which uses its currency as the main tool, changed its settings in January. Reserve Bank of Australia Governor Glenn Stevens reduced interest rates in February and indicated March 3 that policy makers may do so again to support the economy.
“There’s every chance that we will get another rate cut,” said Bill Bovingdon, Sydney-based chief investment officer at Altius Asset Management Pty, which oversees $497 million. “I wouldn’t be surprised to see them go one more time by mid-year.”
While Singapore’s bond market of $161 billion is only about 60 percent the size of Australia’s, it’s the only country in Asia that offers the same top-level AAA debt rank from the three major rating companies. The two governments are among nine worldwide that hold the top credit grades from all three.
