Singapore’s 3Q17 GDP figures of 6.3% QoQ annualized (4.6% YoY) are certainly a big step in the right direction for an earlier move to an upwards sloping NEER path, according to Rob Carnell, Chief Economist at ING.
Key Quotes
“The MAS produced the tiniest of surprises with its monetary policy statement today. Practically no-one was looking for any change to the SGD NEER path, and this was maintained at zero percent with no change to the bands. The MAS has, however, shuffled around their reference to the phrase “a neutral policy stance is appropriate for an extended period…”, which they now refer to as their October 2016 guidance, without then saying that this is still in place. A sort of half-removal then, which leaves the door open to some change in April 2018, without making any firm commitments. Clever, given the prevailing uncertainties.”
“But the direction of travel is becoming clearer. With the policy citing some improvements domestically (very strong 3Q17 GDP figures today) but some caution about the global outlook, the growth forecast range has been narrowed from 1-3% for 2017, to the upper-half of 2-3%, with a higher, if fuzzier midpoint, and 2018 expected to improve further in line with potential growth, though it could be moderate than this year. The inflation outlook is more nuanced, with the core inflation forecast range for 2017 tightened to the midpoint of 1.5% on the previous 1-2% range, and average 1-2% in 2018. But all items inflation is expected to come in at the low point of the previous 0.5-1.5% range for 2017, and is projected to stay in a 0-1% range in 2018, which is pretty low.”
“Our base case was that the April 2018 meeting was used to signal a later increase in the path for the SGD NEER, with the NEER path actually only moving up in October 2018. But today’s statement does raise the probability of an earlier move, and we will be watching both the domestic recovery and signs of any faltering of the IT product replacement cycle in export figures closely to see if we will need to bring this forecast forward.”
“Today’s 3Q17 GDP figures of 6.3% QoQ annualized (4.6% YoY) are certainly a big step in the right direction for an earlier move to an upwards sloping NEER path.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD holds above 1.2350 after UK PMIs
GBP/USD clings to modest daily gains above 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling gather strength.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.