Data Shows Recovery Still On Track

PMI data from Singapore on Monday was positive, the measure rose further into expansionary territory at 50.5 in December, from 50.4 in November. This is the sixth straight month of expansion for the PMI measure and is driven by a pick up in new orders and inventory.

• The Electronics Sector Index rose to 51.2 from 51.1. This is the fifth straight month of expansion and denotes the highest level since September 2018.
• The survey does highlight some headwinds. Overall employment and electronics supplier deliveries both shrank for the eleventh consecutive period, while the pace of growth in new exports slowed, which the report noted could mean that "the higher expansion rate in new orders is fuelled by domestic consumption".
• Markets will look ahead to Singapore Retail Sales for December due at 0500GMT/1400SGT. The headline number is expected to drop 8.1% in November after an 8.6% decline in October.
• USD/SGD is down around 12 pips, last at 1.3193 and back below the 1.32 handle. The pair traded through the level yesterday for the first time since 2018 and dropped as low as 1.3162 before bouncing to 1.3217.
• Yields lower across the curve, some twist steepening seen as general risk off sentiment spurs short end buying. 2-/10-year spread up 6.2bps.