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Bond Market News
US Treasury Yields Ease; DBS Prices $ bonds
October 9, 2026
US Treasury yields eased across the curve, with the short end falling by 3-8bp while the 30Y yield declined by 9bp. The UST 30Y auction priced at 5.618% witnessing strong demand, with a bid-to-cover ratio of 2.54x. Initial Jobless Claims for last week came in at 197k, below expectations of 200k and revised prior week’s print of 199k. Separately, Governor Christopher Waller said further rate hikes will likely be needed to contain inflation, although officials have flexibility on timing and need not raise rates at consecutive meetings. He also highlighted the importance of forward guidance in shaping market expectations. Brent crude slipped below $104/bbl after President Donald Trump said the US would refrain from military strikes ahead of the midterm elections.
Looking at equity markets, the S&P and the Nasdaq closed lower by 0.5% and 1.3% respectively. US IG CDS spreads widened by 0.5bp, while HY CDS spreads widened by 3.0bp. European equity markets also ended lower. European IG CDS spreads were 0.3bp wider, and Crossover spreads were 8.4bp wider. Asian equity markets have opened broadly mixed this morning. Asia ex-Japan CDS spreads widened by 0.8bp.
DBS Group raised $1.5bn via a three-part deal. It raised:
- $500mn via a 3Y bond at a yield of 5.284%, 30bp inside initial guidance of T+70bp area
- $500mn via a 3Y FRN at SOFR+58bp vs initial guidance of SOFR eq. area
- $500mn via a 5Y bond at a yield of 5.491%, 30bp inside initial guidance of T+80bp area
The senior unsecured notes are rated Aa2/AA- (Moody’s/Fitch). Proceeds will be used for general business purposes or for finance and treasury activities, including providing intercompany loans to DBS Bank Ltd. and its subsidiaries.
Scentre Group raised $750mn via a 10Y bond at a yield of 6.242%, 30bp inside initial guidance of T+130bp area. The senior unsecured note is rated A2/A (Moody’s/S&P). Proceeds will be used for general corporate purposes including to repay existing debt.
Rating Changes
- Moody’s Ratings upgrades Maldives’ ratings to Caa1 from Caa2, maintains stable outlook
- Fitch Downgrades Anor Bank to ‘CCC’; Places on Rating Watch Negative
- KronosNet Topco Downgraded To ‘B-‘ On Persistently Negative Cash Flow Generation, Liquidity Pressure; Outlook Negative
Term of the Day: Sovereign Risk Premium
Sovereign risk premium refers to the additional implied spread that a country’s sovereign bonds offer vs. a benchmark for a particular currency. Put differently, it is the incremental return (or yield) that investors demand from a country to buy its sovereign bonds vs. the benchmark.
Talking Heads
“Every new financing announcement feels like another entrant in an auction for investor balance sheet, and that’s creating a level of spread volatility that would have seemed hard to imagine a year ago,… Some days it feels like the market is holding an emergency meeting every few hours to reprice the size of the AI buildout.”
On Being Bullish for First Time in Decade – Vishal Khanduja, Morgan Stanley
“We are pacing ourselves in terms of the magnitude of bets that we are taking,… My conviction 12 months out is very, very high.”
On Global Banks Bolster Japan Debt Teams as Bond Issuance Booms – Dai Kitatani, Goldman Sachs
“Foreign-currency bond issuance by Japanese companies is increasing, including from debut issuers, and I expect that trend to continue,”
Top Gainers and Losers- 09-Oct-26*
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