Daily BriefsMacro

Macro: Singapore: Further Scope For Growth Surprises and more

In today’s briefing:

  • Singapore: Further Scope For Growth Surprises
  • TMI Snapshots:  Macau, Defensives Vs. Cyclicals, Europe’s Recovery
  • FX Dashboard: Thai Baht Not Yet a Buy
  • Rates 10y Dashboard: Colombia’s Curve Steepens on Fiscal Concerns

Singapore: Further Scope For Growth Surprises

By Nigel Chiang

GDP growth in 1Q20 was much stronger than expected, directionally vindicating our full-year forecast of 6.7%, which back in January was significantly above the consensus of 5.5%.

The Monetary Authority of Singapore (MAS) has acknowledged more recently that GDP growth in 2021 could exceed 6.0%, the upper bound of the official forecast range (4-6%).

There is scope for further positive growth surprises, in our view, from a confluence of cyclical tailwinds: robust semiconductor-related activity; re-opening to cross-border travel ahead of schedule; continued normalisation of consumer behaviour; implementation of previous investment commitments; relocation of fund management activity from the region.

Despite this, we do not expect monetary policy settings to be altered this year. Even with the strong growth that we expect this year, the output gap will still be negative by end-2021, turning positive only in the first half of 2022.

Thus, any upside risks to inflation from firming demand will likely be contained by a) remaining slack in the jobs market alongside improvements in labour productivity that caps the extent of increase in unit labour costs, not to mention subdued upward pressure on rents.


TMI Snapshots:  Macau, Defensives Vs. Cyclicals, Europe’s Recovery

By Elan Gore

  • Our indicators have seen a surge in coverage of Macau in the context of the Digital RMB, starting with Macau Chief Executive Ho Lat Seng’s mid-April plan to amend legislation in order to accommodate the e-RMB rollout; sentiment on the Macau gaming sector appears to be pulling back as a result
  • While the long-standing crackdown on VIP junkets has been a factor for Macau’s casino operators throughout the previous cycle, rollout of the Digital RMB may also suppress growth in the important premium mass segment
  • Defensives vs. cyclicals relative sentiment recovered from a multi-year low of -3.5x STDEVs in mid-March to near-neutral readings last week, as the bond rally and flattening yield curve led a few high-profile strategists to call for more defensive positioning; but this phenomenon has now decisively peaked out without any significant thematic reversal, on refreshed expectations of rising yields and action in the commodity complex
  • European recovery indicators have made new post-pandemic highs, aided by improvement in sentiment on the pace of vaccinations, with implications for EUR/USD

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities. 


FX Dashboard: Thai Baht Not Yet a Buy

By Gautam Jain, PhD, CFA

In this note, we go over the reasons behind the underperformance of the Thai baht this year. With the underperformance likely to continue for the time being, we expect an opportunity to buy the currency to open up in the coming weeks.

Separately, the attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.


Rates 10y Dashboard: Colombia’s Curve Steepens on Fiscal Concerns

By Gautam Jain, PhD, CFA

In this note, we discuss the trigger behind the latest bout of steepening of Colombia’s rate curve and argue that the steepening should continue in line with our trade recommendation.

Separately, the attached file is a snapshot of EM 10y rates market, which we produce daily, and where we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to the broad market.


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