Strong Data Largely Ignored

Retail sales released yesterday were better than expected, Y/Y retail sales fell 1.9% in November compared to expectations of an 8.1% drop.

• Earlier in the session today Market Singapore PMI for December was released, the figure rose to 50.5 from 46.7. This is the first time the measure has risen to expansionary territory for since January 2020. Sentiment is buoyed by announcements of vaccination roll-outs and a flatter curve of new cases. The recovery is expected to continue in 2021 as Singapore gradually eases virus restrictions.
• Shreeya Patel, economist at IHS Markit, noted some headwinds: "There were some signs of fragility however: workforce numbers were cut again, and sharper price pressures emerged. Firms continued promotional activity to stimulate a rise in sales, at the cost of profit margins."
• Markets have largely ignored the positive data, USD/SGD last up 16 pips at 1.3192 but still below the 1.32 level after challenging earlier in the session.
• The move higher was helped as DXY bounced off a fresh 33-month low and swung to a gain, with the runoff Senate races in Georgia under close scrutiny. They remain too close to call, as exit polls and early results showed just razor-thin leads for GOP candidates, but absentee ballots may be a game-changer.