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Settling In The New Norm Of Global Easing
Singapore Market Commentary | 06 February 2015
By: Tan Jia Hui
Articles (82) Profile

An ease on global monetary policy seems to have established a new trend. Well, perhaps other than in the US.

The Monetary Authority of Singapore sprang a surprise policy tweak to slow the appreciation of the Singapore dollar on 28 Jan-15 causing a retreat of the local dollar. Other Asian currencies also reacted and followed the decline.

Elsewhere, the Reserve Bank of Australia unexpectedly moved to reduce benchmark interest rate to a new record low of 2.25%.

Over in Asia, China’s HSBC Purchasing Managers’ Index fell to 49.7 in January (a level below 50 indicates a contraction), signaling its first contraction in more than 2 years. As a result, this has sparked speculations of potential economic stimuli from the Chinese government. The economy’s ail for aid were answered, following the People’s Bank of China’s move to lower banks’ required reserve ratio by 50 basis points, thereby allowing more funds to flow into the banking system.

Global oil prices witnessed a huge rebound in the 3 trading days started 2 Feb-15, as the Brent Crude Oil index surged above US$57 a barrel, before paring some of its gains. Does this mark a true major turnaround or will it prove ephemeral?

In Europe, Greece’s new Prime Minister Alexis Tsipras had a rocky first week, as yields of Greek bonds jumped following a standoff with the country’s debtors. The situation only improved after the Tsipras’ government has demonstrated signs of a softening stance towards its debt obligations to the European Union. However, fresh pressure was added as the European Central Bank announced a move to restrict loan movements to the Greek financial system.

Armed with a bachelor in mathematics, Jia Hui keeps close tabs on the oil & gas, and manufacturing sectors in Singapore.

Please click here for more information about this author.

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