2 Mar 2016
Look to increase SGD shorts via short SGD-INR – SocGen
Jason Daw, Research Analyst at Societe Generale, suggests to remain long USD-SGD based on technicals (low end of 6m range, RSI neutral, near 200d MA and trend line support) and macro (weak growth, disinflationary pressures, MAS should ease in April, and SGD NEER to remain in lower half of band) – stars aligning to trade the reversal.
Key Quotes
“Sticking with the theme of SGD weakness, short SGD-INR is looking increasingly appealing for a tactical trade. Upside momentum has stalled and the cross is at the upper end of the two year range (45-49).
Carry is very favourable (60bp/month), long INR positions have probably been largely unwound, and the positive tone for the INR could extend further post the budget, whereas the SGD will remain downwardly biased leading up to expected MAS easing in mid-April.”
Key Quotes
“Sticking with the theme of SGD weakness, short SGD-INR is looking increasingly appealing for a tactical trade. Upside momentum has stalled and the cross is at the upper end of the two year range (45-49).
Carry is very favourable (60bp/month), long INR positions have probably been largely unwound, and the positive tone for the INR could extend further post the budget, whereas the SGD will remain downwardly biased leading up to expected MAS easing in mid-April.”