Hong Kong Dollar Loses On Lower Than Expected Retail Sales

- Hong Kong Dollar Loses On Lower Than ExpectedSales

  • [B]Singapore[/B][B] Manufacturing Declines, SGD  Remains Stagnant[/B]

  • [B]Singapore[/B][B]  St[/B][B]ocks Advance To Record Close[/B]

Retail Sales Figures Decline In March
For the month of March, retail sales in Hong Kong rose 5 percent to HK$8.9 billion. Subsequently, volume advanced on the month, rising 3.5 percent according to the government report released in the overnight session. Although positive for the economy, the report bears a rather pessimistic tone as figures were vastly lower when compared to February’s results. During the month, sales supported a 28.6 percent year on year growth as volume peaked at 25.2 percent. Attributed to the drop off were monthly supermarket sales and motor vehicles, according to government sources which cite increased volatility of the figure in the two months subsequent to Chinese New Year. Nonetheless, it should not take away from the fact that the total figure for the quarter advanced by a healthy 9.4 percent in value terms, higher by 6.6 percent in volume when compared to previous year’s figures. Mixed, the report kept the Hong Kong dollar relatively range bound for the London and New York sessions.

Singapore Manufacturing Contracts In April
The manufacturing sector was dealt a blow during the month of April as overall production contracted for the first time in 13 months. Connected to a slow down in both domestic and overseas orders, the Singapore Institute of Purchasing and Materials Management showed a survey decline of 1.4 points to 49.7 in the month of April. A reading below 50 indicates contractionary activity in the sector. Although factory output tends to be volatile from month to month, the decline shows that the economy may already be experiencing a soft patch, even as domestic factors remain buoyant. Subsequently, the electronics manufacturing index fell 2.4 points, in line with recent downtrend momentum in the survey, to post a 51.1. The lower figure has forced government growth forecasts to remain at the low end of estimates, easing below the 7.9 percent rate of expansion witnessed last year.

Rising To A Record, Singapore Stocks Look Strong
Shares in Singapore vaulted to a record close as bidders made another push in the banking sector. Notably, DBS Group Holdings Ltd. helped boost the overall market, with speculation looking for the lender to post better than expected first quarter earnings. As a result, the nation’s largest lender rose 50 cents or 2.3 percent to close at S$22.20. Subsequently, United Overseas Bank Ltd. also gained, rising 40 cents to close at S$22.40. Both stocks helped to boost the benchmark index higher to close above the 3,422.62 market hit on April 10th. The Straits Times index closed 32.83 points higher at 3,450.64.

Hong Kong Stocks Back En Vogue, Rises To 2-Week High
Stocks in Hong Kong advanced to the highest in two weeks, as developers paced gains on the overall benchmark index. Henderson Land Development Co. helped to boost market sentiment shortly after the company’s share price target was raised by Merrill Lynch & Co. Shares of the region’s third biggest developer by market value jumped HK$3.30 or a whopping 7 percent to close at HK$50.60. Incidentally, Cheung Kong Holdings also helped shares, rising HK$3.30 to close at HK$106.40. Ultimately, bidders won out for the day as the Hang Seng closed higher, adding 293.09 points at 20,681.58.

Technically Speaking

Will Weakness Persist? - Already pulling back from the massive advance the day before, the USDSGD currency pair is set for another leg higher, consolidating just above the 1.5215 (100 hMA) support trendline. Both momentum indicators are suggestive of upward momentum with a sharp convergence in MACD as stochastic enters oversold territory. Ultimately, a break above the 1.5241 (50 hMA) will help to maintain the bid tone, setting sights on the 1.5286 (May 2nd hourly spike high). Downside, however, exists should the aforementioned fail to remain support heading into the Asian session. Downside capping will likely come in the form of the 1.5180 (200 hMA), but not before formidable tests at the 1.5200 psychological figure.