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Why MNI
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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI ASIA OPEN: Heavy Short End Sales Weighs on Rate Cut Odds
MNI ASIA MARKETS ANALYSIS: Curves Flatter Ahead Inauguration
SGD: USD/SGD Close To Decade Lows, Export Trend Supports NEER
USD/SGD tracks at session lows in latest dealings, the pair last near 1.2945. This is very close to intra-session lows from Monday's session. These levels in USD/SGD were last seen back in the latter stages of 2014. Possible downside targets in the pair may rests near the 1.2800 region, which marked a number of highs through the 2013/14 period. Like some other pairs in South East Asia FX, USD/SGD is comfortably sub its 20-day EMA, which is back near 1.3050.
- The earlier August trade data showed export growth slightly below expectations but still positive in y/y terms at 10.7%. Encouragingly, electronic exports were the standout at +35.1%y/y. This broadly fits with trends from other export orientated economies in the region, like South Korea and Taiwan, where the tech side has been a source of strength for export growth.
- A resilient export growth backdrop suggests little need for a MAS policy shift later this year. The chart below plots the SGD NEER y/y changes against smoothed export growth (pushed forward by 6 months). Ultimately, we may see easier policy settings, given global trends and lower domestic inflation pressures in Singapore, but the MAS is unlikely to be a leader in terms of the easing cycle. Note next week delivers August CPI data (due on Monday).
- Per Goldman Sachs, the SGD NEER is around 0.27% from the top end of the policy band, so markets aren't pricing in a sharp shift in the MAS outlook in the near term.
Fig 1: SGD NEER Versus Singapore Export Growth Y/Y (6 Months Forward)
Source: MNI - Market News/Bloomberg
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