Asia FX and Rates Strategy: Singapore Chart Pack

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Asia FX and Rates Strategy: Singapore Chart Pack

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21 Jul 2026 03:46:31 ET │ 28 pages

Asia FX and Rates Strategy

Singapore Chart Pack

CITI'S TAKE

Gordon Goh AC

The combination of strong growth and inflation risk underpins our +65-6657-4150

economics team’s call for another 50bp slope increase in July. We agree that gordon.goh@citi.com

there are significant chances of another slope increase, especially as we are

witnessing another round of Middle East tensions led oil price increase. Rohit Garg AC

Current FX pricing in forwards space implies a close call between the two +65-6657-3471

scenarios. SORA remains low due to flush liquidity. However, in our view, rohit.garg@citi.com

SORA is likely to find support at these levels. Technical factors argue for

higher belly to long end rates. Finally, the softness in front end SG yields has

now left a much larger divergence vs its basket peers and suggests the path

of least resistance is skewed towards higher front-end SG rates.

Most important takeaways from this chart pack are:

In our view, the forward market pricing for the Singapore Dollar NEER reflects the

close call between the choices of keeping policy settings unchanged or tighten it

further in the upcoming policy meeting on 27th July 2026. On the one hand, two

consecutive downside surprises in core inflation and some softness in the labor

market are resulting in expectations that the MAS might keep policy settings

unchanged. On the other hand, there is a case to be made for another slope increase

due to persistent upside risks to inflation from potential spillovers, like electricity

tariffs, and a larger-than-expected positive output gap.

SG money market rates remain low, indicating ample liquidity in the system – which