SINGAPORE RATES WEEKLY : HANGING ON FOR THE FOMC

SGS TABLEUS Libor
1M 0.18475
3M 0.28605
6M 0.4484

Economic News and Releases :

April Retail Sales +0.8% MoM, expected +1.2%
April Retail Sales +5% YoY, expected +5.4%
April Retail Sales Ex Auto YoY -0.7%

A nice rally we saw in the bonds and now all hangs on the FOMC tomorrow (actually Thurs 2am).

I think it matters not what the outcome of the FOMC would be for we all know that there will be no hike this time, but the press conference that will follow and of course, the market positioning into this event.

With the SGD sovereign curve holding well above the US, we would expect Singapore is well buffered against rate hikes out of the US but we cannot be too careful in such times when Indonesia is selling some selling, again, today and the region remains mired in investor confusion. So its probably timely to take bets off and focus on the main draw – the US and the other majors even as the STI tries for its lows of the year.

For that, I will not expect the SGD to weaken too much for this week for all the pessimistic positioning already and to sell into weakness at 1.355-1.36 would be a nice short term bet for me.

A short one for this week but there is really nothing much more to say. Good luck !