HALISTER1: MAS Easing Consistent With Taylor Rule, Stay Short SGD: Redward

MAS Easing Consistent With Taylor Rule, Stay Short SGD: Redward

(Bloomberg) -- While MAS easing today may have been surprising, it is consistent with a Taylor Rule model, Peter Redward, principal at Redward Associates, says in an interview.
  • Continue to short SGD NEER via a 5-country proxy basket and also by receiving 1-year interest rate swaps, Redward says
  • Notable points from MAS statement today include:
    • Growth will likely be at a modest 1.0%-3.0% in 2016, and the level of activity will be slightly below potential
    • External demand will be softer, with concerns about the housing sector
    • Core inflation forecasts have been adjusted down to the lower half of 0.5%-1.5% forecast range
  • USD/SGD up 0.9% to 1.3623
  • SGD 1-year swaps up 12 bps, most since August to 1.4650%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Peter Redward (Redward Associates Ltd)

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