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The upcoming 30Y SGS reopen (auction date: 28 April, size: SGD 1.8bn) will provide a gauge of investor demand of long-duration risk-free SGD assets. Notably, the last ultra-long tenor SGS issuance was in October 2024 and considerations on duration, safety and the relationship between SGD and USD rates have changed. Back then, market participants were still not convinced that Trump would win the US elections. Duration fear got built up through to January where there was peak optimism on the US economy. Since then, despite the fading of US exceptionalism, longer-term UST yields have stayed buoyant. Since November, 30Y US yields generally hovered between 4.4-4.8% and have recently pushed above. Comparatively, 30Y SGS yields have broadly hovered between 2.65-2.85% and are now trading at the lower part of the range with no obvious signs of underperformance despite an upcoming auction.
We see two key reasons why SGD interest rates look like they are decoupling from USD rates. First, SGD liquidity has been incredibly flush. This has been discussed over the past several months with short-term SGD rates drifting lower despite the Fed holding steady. With no triggers on the horizon that may tighten SGD liquidity, low frontend rates will place downward pressure on longer-tenor rates. Second, investors have far greater fear of fiscal laxness in the US (Eurozone and Japan as well) compared to Singapore. Accordingly, there are no oversupply issues for SGS. Taken together, SGSs are a better alternative to USTs from a fundamental perspective. The wide yield discount (>200bps) versus 30Y USTs may not deter investors. 
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