Most analysts (14 out of 15 analysts in Bloomberg’s survey) predicted no alternate in coverage settings. However, the MAS amazed the market by means of elevating the slope of the SGD NEER coverage band. The SGD rallied on contemporary MAS motion and economists at TD Securities see similarly upside given that MAS is in all likelihood to proceed tightening coverage once more in April 2022.
Room for extra SGD upside
“MAS barely raised the slope of the SGD NEER band, stunning us and the market. We count on the slope to be raised to +0.5% from 0% previously. There was once no exchange to the midpoint and width of the SGD NEER band.”
“Despite Q3 GDP coming in under consensus and covid issues closing unresolved, the buildup in exterior and home price pressures outweighed instant boom concerns. The subsequent step may want to be a re-centering of the midpoint at the April 2022 meeting.”
“Given the danger of a greater aggressive tightening at the April 2022 meeting, we see extra room for SGD upside and stay positive on SGD.”
“The route of least resistance favours a decrease USD/SGD, and we count on USD/SGD to exchange to 1.34 (around the 23.6% Fib stage and 200-DMA) by using year-end.”