Singapore: Poor prospects for the industrial sector – UOB

Pablo Piovano FXStreet

Barnabas Gan, Economist at UOB Group, reviewed the recent results from the industrial sector in Singapore.

Key Quotes

“Singapore’s industrial production disappointed market expectations with an 8.4% y/y contraction (+1.6% m/m sa) in July 2020, marking the third straight month of negative growth.”

“The downside surprise came from the contraction in biomedical manufacturing, which fell 24.8% y/y in July 2020. Transport engineering also contracted 37.4% y/y, marking the fourth month of negative print as the industry grapple with low oil prices.”

“The fall in biomedical production may be transient, owing to the likelihood for continued demand for biomedical products for the rest of 2020. Separately, low oil prices expected for the rest of 2020 will likely depress the chemicals and transport engineering clusters.”

“We maintain our view that industrial production will contract by 2.0% in 2020. Risks arising from COVID-19 amid trade headwinds are formidable drags to Singapore’s overall manufacturing environment.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.