Markets Insights

Busy week ahead with economic data releases

Traders looking to see what they tell of how GDP growth is shaping up in 2018

Singapore's January factory output figures are due this afternoon and the February Purchasing Managers' Index survey is slated for release on Friday. Coupled with the latest Budget, the data may shed light on whether and when the Monetary Authority o
Singapore's January factory output figures are due this afternoon and the February Purchasing Managers' Index survey is slated for release on Friday. Coupled with the latest Budget, the data may shed light on whether and when the Monetary Authority of Singapore will tighten monetary policy and strengthen the Singapore dollar. ST PHOTO: LIM YAOHUI

Traders will be kept busy this week with a slew of Singapore economic data releases.

Singapore's January factory output numbers are due this afternoon and the February Purchasing Managers' Index survey - an early indicator of production - is slated for release on Friday.

Trade numbers have already helped the economy to start 2018 on the right foot, with non-oil domestic exports for January recently clocking 13 per cent year-on-year growth.

ING Asia economist Prakash Sakpal noted that the data "will help show how GDP (gross domestic product) growth is shaping up in 2018".

Coupled with the latest Budget, the data may also shed light on whether and when the Monetary Authority of Singapore will tighten monetary policy and strengthen the Singapore dollar.

"The April central bank decision remains a very tough call, and we are still somewhat uncomfortable with our longstanding tightening forecast," he wrote.

"But following the recent stimulative Budget announcement, some very modest offsetting tightening by the Monetary Authority of Singapore seems more probable than it did."

The other nerve-racking conversation topic for market watchers is: What's going on with the United States Federal Reserve's "will they, won't they" rate hike teasing?

Traders around the world have been thrown into confusion over the connections among US domestic inflation, interest rates, Treasury bond yields and stock-market value.

Mr Eli Lee, head of investment strategy at the Bank of Singapore, said: "This more mature stage of the economic cycle - which we are now in - is still a healthy one for equities."

But he cautioned that it is the end of a "Goldilocks" era when everything was "just right", and markets must now brace themselves for a period of greater volatility.

Elsewhere around Asia, Hong Kong releases its fourth-quarter GDP numbers on Wednesday.

And mainland China will return to its first full week of trade since the country shut down for the Spring Festival, as the Chinese New Year is called there.

Chinese PMI numbers are also due this week.

When it comes to Singapore equities, earnings season is winding down, with the bulk of blue chips having delivered their quarterly financial statements.

But investors would do well to watch how Venture Corporation fares.

This Wednesday will mark the first time this year that it reports results as a constituent stock of the benchmark Straits Times Index.

It replaced the now-privatised Global Logistics Properties on Jan 5.

Real estate player City Developments, another index stock, will also turn in its three-month scorecard on Wednesday.

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A version of this article appeared in the print edition of The Straits Times on February 26, 2018, with the headline Busy week ahead with economic data releases. Subscribe