Published:
Yields forecast at 0.4%
The central bank said that the policy of a modest and gradual appreciation of the SGD NEER will help "cap CPI inflation at 2-3% in 2011 from 2.5-3.0% in 2010".
DBS said that the Monetary Authority of Singapore in october increased the slop and width of the SGD NEER policy band, saying that "while inflation has been largely driven by higher car and commodity prices so far this year, other domestic sources of cost pressures have emerged amidst buoyant economic conditions."
DBS said that they expect the SGS curve to steepen somewhat further in 1Q11. Yields are likely to end 1Q11 around 0.4% in the 2Y sector and around 2.55% in the 10Y sector.
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