Singapore Rates Weekly : Vol Addicts
US LIBOR
1M 0.187
3M 0.2813
6M 0.44365
ECONOMIC NEWS AND DATA
May Non Oil Domestic Exports -3.1% MoM, expected -3.2%
May Non Oil Domestic Exports -0.2% YoY, expected +2.3%
May Electronic Exports -2.5%YoY, expected -2.6%
May CPI +0.5% MoM, expected 0.4%
May CPI -0.4% YoY, expected -0.4%
May Core CPI +0.1% YoY, expected +0.4%
Why do we feel more tired than usual ?
Because volatility this year, as far as SGS bonds are concerned, is about twice the average volatility of 2014 and even more for the USDSGD.
Check out the USDSGD 1M ATM vol graph where we have not seen such happy highs since 2013.
I think that markets cannot get enough of it and will continue to want more mainly because liquidity is truly drying up and volumes have become pathetically miniscule as I have been told after speaking to some market participants whose outlook cannot be more dour (and I thought I could not get worse than last year).
We would expect that higher volatility would mean more business until we realise that the higher volatility is the result of the unwillingness for more business that causes illiquidity that in turn leads to volatility !
And if we look at Singapore as an investment centre, Singapore scores C in ‘global fund investor experience’ report : BT.
“FUNDS in Singapore are expensive, are tied to advice that is not priced in a transparent manner, and are backed by inadequate disclosure reports.” http://www.businesstimes.com.sg/companies-markets/singapore-scores-c-in-global-fund-investor-experience-report
It does not look too promising.
I say this as SGDMYR broke a new historic high yesterday (again) and we may go, so what ? https://tradehaven.net/market/fx/fx-thoughts-sgdmyr-makes-history-so-what/
I am not terribly bullish on bonds these days, like I said last Friday, for it will only be a matter of time, regardless of the buffer Singapore has built up against global yields. https://tradehaven.net/market/bonds-in-conversation-a-matter-of-time/
The next worry after Greece would probably not work in the favour of EM and Asia and it has been echoed by Bank of America and Barclays etc. https://tradehaven.net/market/fx/forex-thoughts-grex-in-or-grexit-and-our-next-worries/
Source : Barclays
And I think we would see USDSGD back at 1.35 again long before 1.31.
Good luck !