Singapore’s Dec Industrial Production fell -0.6%, amidst an expectation of a drop of 4.8%. 2012 full year industrial production was marginally higher than 2011, with a gain of 0.1%. With all things considered, a full year growth of 0.1% is paltry when the general theme of 2012 has been one of recovery. Euro-Zone has stabilized, US Markets slowly recovering, even the much feared “Hard Landing” of China was much softer than expected. Singapore should be disappointed, if not deeply concern that the economy is not doing equally well as the rest of the world.
Much of the falling demand is attributed to electronics, with a drop of 16.9% Y/Y. As technological products generally have high betas, it is unusual to see electronics production losing steam when buying iPhones and Samsung Galaxies are no longer a taboo as economies find their feet. There could be something fundamentally not working for Singapore and they need to find out why and not simply dismissing 2012 as just a blip in its economic history.
SGD didn’t move much following the news announcement, with hourly chart still trading within a 10 pip band. We’re trading slightly above 1.23 resistance and price appears to be holding as of now, though we’re on route to test 1.23 for the first time since breaking higher during today’s early Asian trade. A break below exposes trading range of 1.226 – 1.23.
Weekly Chart shows price still trading tightly between 1.215 to 1.23. Stochastic reading is heading into Overbought region, though we still have some distance away from the previous peak back in Jun 2012. This suggest that even though price could still break higher, it is highly unlikely that we could see USD/SGD push above 1.25 resistance with 1 single push. Look out for any potential Stochastic divergence where readings head higher than previous peak, while price almost certainly should not hit beyond the peak of 1.29 when that happens.
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