Singapore: 2020 GDP seen contracting 6.5% - UOB

Pablo Piovano FXStreet

Economist Barnabas Gan and Senior FX Strategist Peter Chia at UOB Group assessed the latest GDP figures in Singapore.

Key Quotes

“Singapore’s 3Q20 GDP contracted 7.0% y/y (+7.9 q/q sa), according to the advance estimates by MTI. With the latest GDP print, Singapore’s economy fell by 6.9% in the first three quarters of 2020.”

“Despite seeing three consecutive quarters of y/y contraction, the latest GDP print at -7.0% (+7.9% q/q sa) is significantly better compared to 2Q20 GDP which clocked -13.3% y/y (-13.2% q/q sa).”

“The overall GDP decline was dragged by sustained softness in the construction and services sector.”

“The manufacturing sector was a key bright spot, expanding at 2.0% y/y in 3Q20 and compared to a contraction of 0.8% y/y in 2Q20.”

“The latest GDP data in 3Q20 further confirms that Singapore’s economy has been improving since the trough in 2Q20. However, the pace of the recovery has been hampered by the continued softness in the construction sector amid a non-existent tourism demand which further dragged the services sector. As such, we downgrade Singapore’s full-year GDP growth to -6.5% in 2020, down from our initial outlook of -5.0%. Should the pace of recovery be sustained into 2021, the MAS will likely keep policy-parameters unchanged in its April 2021 meeting.”

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.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold sticks to a negative bias below $5,000; lacks bearish conviction

Gold remains depressed for the second consecutive day and trades below the $5,000 psychological mark during the Asian session on Tuesday, as a positive risk tone is seen undermining safe-haven assets. Meanwhile, bets for more interest rate cuts by the Fed keep a lid on the recent US Dollar bounce and act as a tailwind for the non-yielding bullion, warranting caution for bearish traders ahead of FOMC minutes on Wednesday.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

US CPI is cooling but what about inflation?

The January CPI data give the impression that the Federal Reserve is finally winning the war against inflation. Not only was the data cooler than expected, but it’s also beginning to edge close to the mystical 2 percent target. CBS News called it “the best inflation news we've had in months.”

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.