SGD: USD/SGD Drifts Higher, Still Sub 20-day EMA, NEER Close To Policy Band Top
USD/SGD has edged a touched higher in the first part of Wednesday trade, last near 1.2905. Recent lows rest close to 1.2800. On the topside the 20-day EMA is near 1.2935. We have had some brief moves above this resistance level since mid April, but these moves haven't been sustained.
- SGD remains around mid range compared to other Asian currencies in terms of returns against the USD, whether that is looked at YTD, or in the past month. It trails the likes of TWD and KRW (up 3.75%, versus +9.8% for TWD and +6.1% for KRW YTD).
- Still, it displays similar characteristics to the likes of KRW and TWD, in terms of very healthy external accounts and potential to benefit from increased hedging flows or repatriation back into local assets.
- The SGD NEER is just off recent highs and despite the MAS easing shift is only 0.40% sub the top end of the policy band (per Goldman Sachs estimates).
- Earlier we had the May PMI print at 51.5, versus 52.8 in April. Still in expansion territory but well off 2024 highs. Singapore growth momentum hasn't been as strong as that seen in Taiwan. Singapore retail sales print tomorrow.
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AUD: AUDUSD Continues Trending Higher On US$ Weakness, AUDNZD Lower
AUDUSD is off its intraday low of 0.6432 to be up 0.5% to 0.6468 following Friday’s outperformance. It reached a high of 0.6481 earlier helped by US President Trump suggesting today that some trade deals could be announced this week. With the US dollar continuing to weaken (USD BBDXY index -0.4%), the G10 is broadly stronger against the greenback.
- AUDJPY is lower in the softer risk environment. The pair is down 0.2% to 93.25 after a high of 93.59.
- AUDNZD has trended down through the session and is now -0.2% to 1.0816 after a low of 1.0814.
- AUDEUR is little changed at 0.5703 off the intraday trough of 0.5686. AUDGBP is 0.2% higher at 0.4865.
- Many Asian markets are shut today but equities are generally weaker with ASX down 0.8% and TAIEX -2.1%. The S&P e-mini is down 0.7%. Oil prices are sharply weaker with WTI -3.9% to $56.01/bbl. Copper is up 0.6% and iron ore is steady around $97/t.
- Later US services ISM/PMI data are released. The UK is closed.
ASIA STOCKS: Strong Inflows Continue Resume for Taiwan
Taiwan has experienced very strong inflows as signs of a thawing in the trade war resonate with investors.
- South Korea: Recorded outflows of -$65m as of Friday, bringing the 5-day total to +$722m. 2025 to date flows are -$12,329m. The 5-day average is +$144m, the 20-day average is -$254m and the 100-day average of -$144m.
- Taiwan: Had inflows of +$1,244m as of Friday, with total inflows of +$2,144m over the past 5 days. YTD flows are negative at -$17,215. The 5-day average is +$429m, the 20-day average of +$53m and the 100-day average of -$173m.
- India: Had inflows of +$20m as of the 30th, with total inflows of +$1,814m over the past 5 days. YTD flows are negative -$12,266m. The 5-day average is +$363m, the 20-day average of +$74m and the 100-day average of -$111m.
- Indonesia: Had inflows of +$8m as of Friday, with total inflows of +$18m over the prior five days. YTD flows are negative -$3,055m. The 5-day average is +$4m, the 20-day average -$51m and the 100-day average -$37m
- Thailand: Recorded outflows of -$41m as of Friday, outflows totaling -$12m over the past 5 days. YTD flows are negative at -$1,645m. The 5-day average is -$2m, the 20-day average of -$24m the 100-day average of -$19m.
- Malaysia: Recorded inflows of +$80m as of Friday, totaling +$227m over the past 5 days. YTD flows are negative at -$2,579m. The 5-day average is +$45m, the 20-day average of -$16m and the 100-day average of -$32m.
- Philippines: Saw inflows of +$12m as of Friday, with net inflows of +$45m over the past 5 days. YTD flows are negative at -$252m. The 5-day average is +$9m, the 20-day average of -$2m the 100-day average of -$4m.
INDONESIA: VIEW: Goldman Sachs Expects 100bp Easing By End-2025
The impact on headline inflation of the government’s electricity discount continued to unwind in April with the CPI rising 1.95% y/y from 1.0% y/y in March and -0.1% in February. Core remained at 2.5% y/y for the third consecutive month but well within Bank Indonesia’s (BI) 1.5-3.5% target corridor. Goldman Sachs continues to forecast BI will ease by a further 100bp by end-2025 if the rupiah will allow it. It sees a risk that rate cuts could continue to be delayed if the “IDR continues to underperform peer currencies”.
- GS said “Indonesia's headline CPI inflation increased to 2.0% yoy in April, returning to the central bank's inflation target band of 1.5-3.5% (vs. 1.0% yoy in March). Today's reading was above our and Bloomberg consensus expectations. On a seasonally adjusted, sequential basis, headline CPI slowed to 1.1% mom s.a. in April from 1.6% mom s.a. in the previous month.”
- “Housing and utilities inflation rebounded to 1.6% yoy in April (vs. -4.7% yoy in March) mainly from a normalization of electricity tariffs. This contributed 26bp towards the headline inflation in April, compared to -77bp the previous month.”
- “Core inflation, which excludes food and administered goods, was unchanged at 2.5% yoy in April as faster personal care inflation driven by high gold prices being offset by generally slower domestic goods and services inflation.”
