Market Summary

Yield Movements

Yields on local currency (LCY) government debt securities in Singapore shifted upward between 1 June and 31 August, with yields rising by an average of 27 basis points. Higher energy costs linked to the Middle East conflict reinforced inflation concerns, as consumer price inflation accelerated to 2.2% year-on-year in July from 1.9% in June. The Monetary Authority of Singapore subsequently tightened monetary policy on 27 July, while the 2026 gross domestic product growth forecast was raised to 4.5% - 5.5% from 2.0% - 4.0% following stronger first-half economic activity.

Local Currency Bond Market Size and Issuance

After expanding in the first quarter, Singapore's LCY bond market contracted 0.4% quarter-on-quarter (q-o-q) to SGD327.8 billion at the end of the second quarter. The decline reflected a 1.5% q-o-q fall in government bonds outstanding, which more than offset an increase in corporate bonds. LCY bond issuance moved in the opposite direction, rising 7.0% q-o-q to SGD13.0 billion as government and corporate bond issuance increased 9.9% q-o-q and 2.9% q-o-q, respectively.

Sustainable Bond Market

Sustainable bonds outstanding rose 1.8% q-o-q to USD36.1 billion at the end of June, moderating from the 6.7% increase in the previous quarter. Green instruments continued to dominate the market, accounting for 89.1% of the total. The market also retained a long maturity profile, with all central government sustainable bonds carrying tenors above 10 years and corporate sustainable bonds recording a size-weighted average tenor of 16.0 years.