SINGAPORE: Security & Geopolitics Play Notable Role In 2026 Budget
Feb-12 11:36
PM Lawrence Wong has committed his gov't to maintaining its defence spending at 3% of GDP as he outlined the 2026 budget to parliament earlier today. However, amid an increasingly unstable regional and global political landscape, he stated that this could be increased if required. Wong, who also serves as finance minister, said that “Taken together, we expect overall security-related expenditures to rise in the coming years – to keep Singapore safe and secure in a far more complex threat environment.”
- Wong noted armed conflicts, “...are not confined to distant regions. Closer to home, we witnessed one of the most serious armed clashes involving ASEAN member states in years,” referring to the border war between Thailand and Cambodia.
- Given Singapore's reliance on international trade and the services sector, it is vulnerable to increasingly complex cyberattacks from state and non-state actors. Wong said in his address that “Singapore is an attractive target. We have faced attacks from malicious cyber actors, including hostile information campaigns and deliberate attempts to undermine our national security.”
- On the major shift in the international political order, Wong laments, “It underwrote global security, championed open markets, and helped form the institutions and rules that enabled shared prosperity across the world – including here in Asia. That era has now come to an end”, adding that “clear and growing signs of fragility in the global economy” are likely to dampen Singapore's growth prospects in 2026.
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FOREX: Cross/JPY Extending Surge Higher as Domestic Politics Weighs
Jan-13 11:35
- Ongoing concerns surrounding the domestic political backdrop in Japan has further weighed on the Japanese currency Tuesday, while the strong rebound for the major equity benchmarks on Monday has continued to provide a supportive tone for cross/JPY.
- US treasuries are also approaching some pivotal levels, which could provide further headwinds for the Yen should the 10-year yield break meaningfully above 4.20. A test of the BOJ/MOF resolve currently looks inevitable and any move for USDJPY above 160.00 would dramatically increase the chances of the MOF getting involved. Until then, the path of least resistance remains higher for Cross/JPY.
- We have highlighted that GBPJPY has extended its sharp upswing, which gathered momentum on a break of 208.00 in December and now places the cross at the highest level since mid-2008. Today’s price action has taken spot to a fresh cycle high of 214.30 this morning, an impressive 400 pip rally from last week’s test of 20-day EMA support
- A key medium-term target is at 215.88, the July 2008 high, while above here, 219.45 is another notable level, the 76.4% retracement of the 2007-2011 range.
- Both AUDJPY and MXNJPY charts continue to standout as well, extending their recoveries from last year’s lows to around 24% and 30% respectively, and eroding solid portions of the global carry unwind induced selloffs in 2024.
- For AUDJPY, next resistance comes in at 107.41 - top of a bull channel drawn from the Nov 6 ' 25 low (shown below). Key resistance remains at 109.37, a break of which would place the cross at its highest point since 1991.
US 10YR FUTURE TECHS: (H6) Bear Threat Remains Present
Jan-13 11:34
- RES 4: 113-00+ 61.8% retracement of the Nov 25 - Dec 10 bear leg
- RES 3: 112-31 High Dec 18 and key short-term resistance
- RES 2: 112-25+ High Dec 30 / 31
- RES 1: 112-22 High Jan 7
- PRICE: 112-02 @ 11:23 GMT Jan 13
- SUP 1: 111-29 Low Dec 10 and the bear trigger
- SUP 2: 111-19 1.236 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 3: 111-11 1.382 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 4: 111-00 Round number support
Treasuries are softer but for now remain above a key support at 111-29, the Dec 10 low. The trend set-up is bearish and a breach of 111-29 would confirm a continuation of the bear cycle. Note that a head and shoulders reversal pattern on the daily chart also highlights a bearish threat. Scope is seen for a move towards 111-19 initially, a Fibonacci projection. Key short-term resistance is unchanged at 112-31, the Dec 18 high.
LOOK AHEAD: Tuesday Data Calendar: CPI, ADP Weekly, New Home Sales, 30Y Re-Open
Jan-13 11:29
- US Data/Speaker Calendar (prior, estimate). All times ET
- 01/13 0600 NFIB Small Business Optimism reported 99.5 vs. 99.0 prior
- 01/13 0815 ADP Weekly NER Pulse
- 01/13 0830 CPI MoM (0.3 est), YoY (2.7%, 2.7%)
- 01/13 0830 Core CPI MoM (0.3% est), YoY (2.6%, 2.7%)
- 01/13 0855 Redbook Retail Sales Index
- 01/13 1000 New Home Sales (715k est), MoM (-10.6% est)
- 01/13 1000 StL Fed Musalem outlook, Q&A event hosted by MNI
- 01/13 1130 US Tsy $75B 6W bill auction
- 01/13 1300 US Tsy $22B 30Y Bond auction re-open (912810UP1)
- 01/13 1400 Treasury Budget
- 01/13 1600 Richmond Fed Tom Barkin moderated discussion
- Source: Bloomberg Finance L.P. / MNI
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