SGS Perspectives

类型：投资策略机构：大华银行有限公司研究员：大华银行研究所日期：2015-08-17

SingaporeAlthough it was a short week in Singapore, it was nonetheless an exciting one. We first had the release of Singapore’s2Q 2015 GDP where the growth rate of 1.8% y/y surprised market’s 1.6% y/y forecast. That said, it was the slowest onyeargrowth for a quarter in nearly three years, due to the very weak manufacturing sector. The manufacturing sector’sperformance remained lackluster, and we still maintain our estimates for a 1% contraction in Singapore’s industrialproduction this year as key headwinds will likely come from the transport engineering and biomedical manufacturingclusters. Over in the services producing industries, the finance & insurance, infocomms, and wholesale & retail trademaintained robust growth rates in 2Q. The Ministry of Trade and Industry (MTI) had narrowed their 2015 GDPforecast to 2.0% to 2.5%, from 2.0% to 4.0% earlier, while we maintain our 2015 GDP growth forecast of 2.5%.

    Shortly after the GDP release, China’s central bank surprised the world with the devaluation of the RMB over the nextthree days and that saw the SGD weakening against the USD in a double-quick fashion. Indeed, judging from the GDPgrowth and core inflation forecasts from the government, we still do not think that the Monetary Authority ofSingapore (MAS) will change the current policy stance of a “modest and gradual appreciation” of the SGD NEER in theirupcoming October 2015 meeting. However, the market could be increasingly looking out for some form of easing (eg:in the form of a lowering of the SGD NEER midpoint) due to the RMB devaluation exercise, and especially as the SGDNEER has been trading at the weaker portion of the trading band.

    Further out, if China continues on its devaluation stance, the USD/SGD will probably end 3Q at 1.45 before easing toend at 1.43 at the end of the year.

    Singapore’s retail sales for the month of June will be released today and market is expecting a 3.5% y/y expansion,compared to the 6.1% y/y expansion a month ago. However, excluding motor vehicles, retail sales is expected tocontract 2.6% y/y.

    Next week, the key data release will be Singapore’s non-oil domestic exports (NODX) on 17 Aug and we are expecting a2.4% y/y contraction.

    US & Developed EconomiesTonight, we will be closely watching July industrial production numbers coming out from the US, where consensus isexpecting a 0.3% m/m gain, slightly higher than the revised 0.2% m/m gain a month ago. Thereafter, the next keyindicator that’s on our dashboard will be the August University of Michigan consumer sentiment index which looks tobe climbing higher to the 93.5 mark, from 93.1 in the previous month.

    The key US data next week (17-21 Aug) will revolve around the July CPI inflation (19 Aug) and the US housing marketincluding August NAHB housing market index (17 Aug), July housing starts (18 Aug), July building permits (18 Aug),weekly MBA mortgage applications (19 Aug), and July existing home sales (20 Aug). Other US economic data releaseswill include the August Empire manufacturing survey (17 Aug), July real average weekly earnings (19 Aug), the usualweekly initial jobless claims on Thursday (20 Aug), the August Philadelphia Fed business outlook survey (20 Aug), and the July leading index (20 Aug). There are no significant US data release on Friday (21 Aug), other than the Markit USmanufacturing PMI release for August.

    As for US Treasury auction activity this week, it will be a usual start as the auctions limited on the short end with the USTreasury selling 3- and 6-month bills on Monday (17 Aug), and 4-week & 52-week bills on Tuesday (18 Aug). And later inthe week, the US Treasury will tap on its longer-dated bond auction market with a 5-year Treasury Inflation ProtectedSecurities (TIPS) reopening on Thursday (20 Aug). There is only Minneapolis Fed President, Narayana Kocherlakota(non-voter in 2015 FOMC) scheduled to speak at a Bank of Korea event on 20 August. We will have the release of theFOMC minutes from the 28/29 July FOMC meeting on 19 Aug (20 Aug, 2am Singapore time). The Reserve Bank ofAustralia will release its August meeting minutes on 18 August.

    The key economic data from the developed economies this week will be the 2Q GDP data release from Japan (17 Aug)followed by Japan’s July export, import, trade balance data (19 Aug). Other data of interest include the June tradebalance for euro-zone (17 Aug), UK July CPI, RPI and PPI (19 Aug), UK July retail sales (20 Aug).