Coronavirus Restrictions Likely To Weigh On GDP

The focus for SGD today will be on GDP data due at 0100BST/0800HKT. The advanced Q2 Y/Y figure is expected to have risen 14.8%, up from 1.3% previously, the Q/Q print is expected to contract 1.8% from a 3.1% last time out.

• Goldman Sachs are slightly more pessimistic than consensus: "We expect real GDP to contract 5.5% qoq s.a. annualized (vs. +13.1% qoq s.a annualized in Q1) as a result of the tighter social distancing restrictions imposed since mid-May. High frequency data for April and May have shown sustained sequential improvement on external demand, with exports growing fairly strongly until May and industrial production rising 3.4% qoq s.a. in Q2 (average April-May) versus Q1. However, consumer-facing industries such as F&B and hotels were likely hit by the new restrictions given on-site dining was banned amid other restrictions on those industries. The sequential contraction implies a year-over-year growth of 15% up from 1.3% yoy in the previous quarter (given low base effects from the first round of stringent social distancing measures imposed in Q2 last year)."
• USD/SGD rose through the session on Tuesday, pressured higher by a stronger greenback. The move has taken the pair to 2021 highs of 1.3562, last trades at 1.3556. The recent upside has clouded the technical picture with rarified air above the pair, resistance is seen at the psychological 1.36 level and 1.3726, a 38.2% retracement level.