I attended a talk by a well-known economist of a local bank last night. What I heard at this talk? Here are snippets:
1. predicted there will be technical recession in third quarter for Singapore. Forecast is 0.3% contraction on quarter-on-quarter basis and 1.4% growth on year-on-year basis.
2. Forecast for whole of 2012, Gross Domestic Product growth rate is 2.0%. (This is within range forecast by Singapore Government of 1.5% to 2.5%.) Forecast for 2013 is 3.5% growth.
3. Capital flow into Asia bond markets due to cheaper cost of US dollar searching for higher yield in this part of world.
4. US’ Quantitative Easing (QE3) resulted in debasement of US dollars against other currencies. Forecast of US dollar (USD) against Singapore dollar (SGD) is 1.20 SGD for 1 USD in the final quarter. Currently, USD/SGD is trading1.2312.
5. Because of debasement of USD, gold value has moved up.
6. Australian dollar (AUD) forecast to weaken in the short term against Singapore dollar because of current economic condition of Australia. But in the long-term, it will be good. In the fourth quarter, forecast is 1.2505 SGD to 1 AUD. Currently, AUD is trading at 1.2574.
7. China is cautious with the economy. The policy maker is keeping Chinese Yuan (CNY) low for export competiveness in 2012. CNY is currently trading at 0.1957 SGD against 1 CNY. Forecast that CNY will strengthen in 2013.
8. Eurozone countries are expected to struggle for 2-3 years. The market is hoping that Spain can seek bailout from ECB and this will be positive if it happens.
9. There is 60% chance that Monetary Authority of Singapore (MAS) will flatten the slope of currency appreciation of Singapore dollar against a basket of currencies in the October Macroeconomic Review. Currently, Singapore dollar is strong and MAS is the only central bank in Asia that is still hawkish in keeping its currency strong.
10. predicted that interest rate in Singapore will be flat going into 2013.
(Please note that this is what I heard and there are many aspects of the presentation not covered in this blog post. As in any public talk, there are elements of human errors and omissions.)
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