Exports Rise, But Pace Slows

Singapore dollar is weaker, USD/SGD last up 9 pips at 1.3465. The rate has moved in a tight range this week, oscillating between highs of 1.3484, and lows of 1.3428. SGD 1-month implied volatility is off March highs, last at 4.80.

• Data earlier in the session showed February electronics exports rose 7.4% Y/Y, while non-oil exports rise 4.2% Y/Y; against estimates of 6.1%, down from 12.7% in January. The drop is attributed to LNY falling in the survey period.
• ING says: "The latest strong export figures from Singapore take place against a backdrop of still weak external demand, with the Covid-19 pandemic still causing problems in some of Singapore's main export markets and reflected in still large year-on-year declines in exports to the US, Europe and Japan."
• "The activity data confirm that Singapore's economy is off to a strong start in 2021 even as the rise in Covid-19 cases elsewhere in the region and in other parts of the world weighed on the economic recovery. We see this economy turning the corner to positive YoY growth in the current quarter. We have recently revised our GDP growth forecast for 1Q21 higher to +0.2% YoY from -2.7%. Our full-year growth view of 5.2% YoY sits in the middle of the government's 4-6% forecast range for the year."
• "Macro policies have been accommodative enough to support the recovery and are expected to remain so over the rest of the year. Indeed, the Monetary Authority of Singapore's shift a year ago to a neutral monetary policy targeting zero appreciation of S$-NEER has served well for the export-driven recovery. We believe the MAS will see through the recent export strength and maintain its current policy stance throughout this year."