Recent PMI updates for Singapore have painted a mixed picture. Both the manufacturing (49.9) and electronics sector (49.4) PMI softened slightly and are just below the 50 expansion/contraction line. This likely owes to global headwinds, amid signs of softening global demand. Still, today's S&P PMI update for Singapore, which encompasses the whole economy, remained very firm at 57.5 (56.0) previously.
- We get a further update on domestic demand later today, with August retail sales due.
- Recent data outcomes suggest a firm domestic backdrop, albeit with external headwinds. Coupled with continued upside inflation surprises, points to risks of further MAS tightening.
- The October policy meeting is likely to be held next week.
- According to Goldman Sachs estimates, the NEER is off recent highs. We are -0.54% sub the top end of the MAS policy band. This is below recent highs, but we were at -0.77% at the end of September.