Singapore’s non-oil domestic exports fell 4.8% year-on year in September, deepening concerns of a sluggish economic outlook as external demand remains weak.

In fact, from NODX shipments, to all top 10 major markets showed contraction, with the only exception from Hong Kong. The largest contributors to the decline in NODX were Malaysia, Indonesia and the US.  

By segments, electronic exports experienced the biggest slump, with ICs (-6.3%), disk drives (-55%) and parts of PCs (-22.4%) facing strong headwinds from sluggish external demand. In non-electric segments, the worst performers include ships & boats (-99%), civil engineering equipment parts (-47%) and petrochemicals (-6.5%). 

These readings compound concerns regarding the economic outlook of Singapore following the lackluster 3Q GDP readings last week. The Singapore dollar has fallen almost 4% against the greenback over the last three months. As the earnings season kick off soon, analysts and investors would have probably lowered their expectations on the third quarter corporate earnings based on the recent macro data. The Straits Times Index closed marginally lower on Monday. 

China 3Q GDP and ECB rate decision in spotlight

China will announce its third quarter GDP on Wed morning, which will set the tone for Asian equities especially Hong Kong. Consensus forecasts suggest the readings to be 6.7%, staying at the same level over the last two quarters. A higher reading would probably send equities higher because of more evidence indicate that China’s economy has reached a bottom. A lower reading, however, would dampen market confidence and would probably lead the country’s currency lower.

Separately, the European Central Bank will announce its interest rate decision on Thursday. The implied probability of a further rate cut by ECB on Thursday stands only at 10%, which illustrates how consensus is looking to hold fire this time. EUR/USD is traded near to key support level of 1.1000 area with the near term resistance level at 1.1220 area.


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