Singapore: Small improvement in the Manufacturing PMI – UOB

Pablo Piovano FXStreet

UOB Group’s Senior Economist Alvin Liew and Associate Economist Jester Koh comment on the publication of the PMI results in Singapore.

Key Takeaways

Singapore’s manufacturing outlook improved marginally as the latest Purchasing Managers’ Index (PMI) inched higher by 0.1 point to 49.9 in Aug (from 49.8 in Jul), the third consecutive month of improvement. However, the reading implies the 6th straight month of contraction (i.e. sub-50) in overall activity for the manufacturing sector, after a neutral print of 50.0 in Feb 23.

Singapore Manufacturing PMI Outlook – While we are heartened by the third consecutive month of marginal improvement in the headline PMI, the sub-50 print corroborates our view that Singapore still faces headwinds in the manufacturing sector as many key sub-indices of the PMI remain in contraction territory.

We may see a few more months of sub-50 PMI prints for the electronics sector before positive prints emerge towards the end of the year while the headline PMI could turn expansionary (above 50.0) in the next few months. We maintain our forecast for Singapore’s 2023 manufacturing to contract by 5.4%.

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.

USD/JPY stays below 160.50 as markets assess BoJ decision

USD/JPY fluctuates in a relatively narrow range above 160.00 on Tuesday as markets assess the Bank of Japan's (BoJ) decision to raise the policy rate by 25 at the June meeting. Meanwhile, investors keep a close eye on news coming out of the Middle East, while preparing for the critical Fed meeting.

AUD/USD trades in tight channel near 0.7050 despite hawkish RBA message

AUD/USD trades modestly lower on the day at around 0.7050 on Tuesday as markets adopt a cautious stance amid a lack of details surrounding the US-Iran peace agreement. The Reserve Bank of Australia (RBA) left the door open for possible policy tightening after leaving the interest rate unchanged, as expected, at the June meeting but failed to boost the Australian Dollar.

Gold trims gains, approaches $4,300

Gold now surrenders part of its initial advance and recedes to the vicinity of the $4,350 mark per troy ounce on Tuesday. The early enthusiasm sparked by the US-Iran peace deal has faded somewhat, prompting investors to adopt a more prudent stance as they await further details of the agreement and key guidance from the Fed.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it.

BoJ just hiked and US-Iran deal is on the table: Why Japanese Yen is still around 160.00

The Bank of Japan lifted interest rates from 0.75% to 1.00%, its highest level in more than three decades. The landmark move aims to stabilize a sharply weakening Japanese Yen, but by looking at the immediate market reaction, it doesn’t look like it’s going to work.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it, focusing instead on slowing economic growth and proving that central bank messaging alone isn’t always enough to drive currencies.