Singapore: PMI points to transitory weakness – UOB

FXStreet Insights Team FXStreet

UOB economist Jester Koh highlights that Singapore’s electronics PMI rose in August, with broad-based gains in new export orders, output and backlogs. Koh argues recent softness in electronics NODX and IP likely reflects capacity constraints rather than weaker end demand, and suggests inventory drawdowns and AI-related tailwinds should support future electronics production.

Electronics PMI signals resilient demand

"Singapore's electronics PMI rose 0.2pt to 52.6 in Aug, with broad-based improvements in new export orders (Aug: 52.8, Jul: 52.6), output (Aug: 52.5, Jul: 52.2), stock of input purchases (Aug: 52.6, Jul: 52.4) and order backlogs (Aug: 52.8, Jul: 52.5), reflecting strengthening AI-related tailwinds amid the global agentic AI capex buildout."

"The stronger Aug electronics PMI suggests that recent weakness in electronics NODX and IP likely reflects capacity constraints rather than softening end demand, further evidenced by the continued decline in the stocks of finished goods sub-index (Aug: 49.0, Jul: 49.3), indicating that firms are drawing down existing inventories to meet rising demand."

"This should support electronics IP in the months ahead given the eventual need for inventory replenishment."

"The re-escalation of the Middle East conflict since Jul led to a further deterioration in the supplier deliveries subindex (overall: 47.5 from 47.8; electronics: 47.3 from 47.6), with lead times lengthening as some cargo shipments were likely diverted from the Suez Canal/Bab el-Mandeb Strait route to the Cape of Good Hope."

"The input price sub-index for both the overall (Aug: 51.8, Jul: 51.6) and electronics PMI (Aug: 53.0, Jul: 52.7) increased, reflecting the surge in energy prices in Aug, although the increase was more pronounced in the latter, likely reflecting tech-flation pressures associated with the global chip shortage."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

USD/JPY trims losses; focus is back to 156.00

USD/JPY now bounces off the area of multi-month lows and appears headed toward the 156.00 region ahead of the opening bell in Asia. The sharp pullback in spot comes in response to the sudden strengthening of the Japanese Yen, reflecting growing conviction among investors that the BoJ could deliver another interest rate hike as early as its September 18 policy meeting.

AUD/USD looks constructive above 0.7200

AUD/USD adds to Wednesday’s advance, reaching fresh four-month highs north of 0.7200 the figure late on Thursday. The pair’s solid performance follows the sharp sell-off in the US Dollar while market participants gear up for the release of US NFP on Friday.

Gold struggles to extend the bounce past $4,500

Gold adds to Wednesday’s gains and reclaims the area near the key $4,500 mark per troy ounce on Thursday. The strong decline in the US Dollar coupled with further weakness in US Treasury yields across the board also bolsters the move higher in the precious metal.

Bitcoin and Gold Outlook: BTC and XAU recover as US ISM Services PMI edges higher in August

Bitcoin (BTC) strongly rises to trade above the pivotal $80,000 level on Thursday. The Crypto King is rallying alongside broader cryptocurrency prices following the release of the United States (US) Services PMI. Gold (XAU/USD) is similarly bullish, trading at $4,500 at the time of writing. The metal is up over 2% on the day, signaling the return of bulls as market sentiment improves.

Canada's 6.4% unemployment rate: Why Friday's jobs print puts the BoC's slack story on trial

The Bank of Canada (BoC) held at 2.25% on Wednesday for a seventh straight meeting and rewrote the one paragraph that still argues against a hike. In July, the BoC’s statement called the labour market soft and pinned the unemployment rate inside a 6.5%-7% range it had held since the end of 2024. July's Labour Force Survey (LFS) then printed 6.4%.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.