Another MAS easing on the cards after extremely weak NODX print, say analysts

February NODX fell by the most in two years.

Analysts warned today that the surprisingly weak non-oil domestic exports (NODX) print for February makes another policy easing by the Monetary Authority of Singapore (MAS) more likely.

For instance, UOB’s Francis Tan noted that the market would be looking for stimulative policies from policymakers to give exports a leg up after starting on a weak footing in 2015.

“Our view that the MAS will likely re-center the SGD NEER midpoint lower in their upcoming April policy meeting by 2% points is due more to the fact that the SGD NEER is currently trading near the weaker 2% band. Our USD/SGD forecast for end 2015 remains at 1.44. That may inadvertently provide some support for Singapore’s exports value,” Tan stated in a report.

Meanwhile, Bank of America Merrill Lynch economist Hak Bin Chua noted that the poor reading brings more downside risks to first-quarter GDP growth.

“We expect the Monetary Authority of Singapore (MAS) to further ease policy at its mid-April meeting, given weaker growth prospects and lower inflation risks. We see downside risks to our full year growth forecast of +2.8%, and believe there is a high likelihood that the government will have to reduce the GDP growth forecast to 1%- 3% before mid-year, from the current 2%-4%,” Chua noted.