Gauging SGD rates underperformance vs USD rates from a receive perspective becomes more important as the monetary policy cycle turns. However, the timing and levels are which this trade are more difficult to grasp. Under twin tightening (the Fed and MAS), we would reasonably assume that SGD rates would trade at a discount to USD rates. Accordingly, the discount should also start to erode when both central banks pull back from tight monetary policies. However, when we look at the 5Y SORA-SOFR spread, it has generally been maintained with both outright rates falling by roughly the same magnitude over the past three months. There are a few considerations as to why 5Y SORA has fallen by so much. First, the market could be expecting the Fed to ease but the MAS to maintain a steep SGDNEER slope for some time. Second, significant USD weakness could have led to much flusher SGD liquidity, driving SGD rates lower in the process. With NFP looming and USD rates trading dovish after the JOLT job opening figures (actual: 7.6mn, consensus: 8.2mn), it is plausible for the 5Y SORA-SOFR spread to get wider if USD rates pop in the event of labour data beat. This would perhaps tilt risk-to-reward better towards pay SORA versus receive SOFR trades. 
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