Likonomics Vs Abenomics and Singapore
No fun watching the clash of the titans in our own backyard.
Remember when I wrote that China is at war with Japan ? Well, the economists are starting to realise it from their ivory towers.
“Japanese Prime Minister Shinzo Abe’s policies to revive the economy after two decades of stagnation inspired ‘Abenomics’…. wants to lift inflation to at least two per cent, weaken the yen and print money and boost public investment.” (SCMP)
“Barclays Capital believes that the three pillars of Li’s economic policies are straightforward: no stimulus, de-leveraging and structural reform.” (SCMP)
Xi Says GDP Not Officials’ Sole Focus in Signal on Growth (Bloomberg)
And they are serious.
Japan and ASEAN
Main beneficiary – Thailand. Followed by the Philippines. Very biased looking at the headlines.
Mitsubishi UFJ to Buy Majority Stake in Thai Bank for $5.6 Billion
China is on a different warpath.
Chinese Malls Waive Rents as Vacancies Loom: Real Estate
China Police Detain Some GlaxoSmithKline Employees
Singapore is more vested in China than the rest of Asean. Japan is not that keen on us.
It looks like Singapore’s only saving grace is her trade ties with Thailand and the rest. Such as Vietnam, where Singapore is the largest investor so far.
China and Malaysia remains Singapore’s largest export markets.
SGD NEER & Outlook
This should point to the SGD coming off the NEER if you ask me. And it appears to be happening. SGD is going flat to negative on the NEER and will continue to weaken as a trend.
My opinion is that we are likely to see USDSGD take out the 1.30 resistance, a level not seen since in 18 mths even as MAS reiterates their strong SGD stance because the pressure going forward will be even greater. This is like in the case of Australia delaying their cuts, causing bigger pressure on the currency for future cuts.
I bet there are many purists who will be disagreeing with me on this one.
- Putting the Funky SGD Policy to the Test (tradehaven.me)
- Believe Me, China Is At War With Japan (Sun Tze was From China) (tradehaven.me)
Not me – I have always held USDSGD for a year end target of 1.3000 since the beginning of this year. When the consensus is overwhelmingly in favour of 1.2000, taking the contrarian view pays off.
Oh no, does that means the prices of Chanels and BMWs are going to go up!!??
Soon the roads will only be BMWs .. and Mercs… check out the car stats…. the Jap cars are going extinct !
Pingback: Backing Down on The SGD – MAS Inflation Outlook | tradehaven