MAS policy review and China GDP in focus

The market is keenly awaiting the semi-annual MAS policy review (Tuesday). The economists expect the MAS to keep the slope, width and midpoint of the SGD NEER policy band unchanged. 

It is believed that the risk-reward at April MAS meeting is asymmetrically skewed. Although the analyst expectations' curve has moved from easing-heavy to a symmetrical one, recent price action in SGD NEER and SGS suggests market expectations are skewed towards a no-change outcome.

"Any easing move, in our view, is likely to result in sharper moves in SGD assets and we see negative asymmetry in the risk-reward. We maintain our recommendation of being short SGDPHP . On the same day, preliminary Q1 GDP for Singapore is expected to moderate to 1.0% q/q saar from 4.9% previously'', Says Barclays

Bank Indonesia (BI) will also meet on Tuesday, and they are expected to keep policy rates on hold, given that fuel prices bottomed out in January-February and concerns over IDR volatility and current account deficit remain.

Another important release would be China's Q1 GDP and activity data for March (Wednesday). 

"We expect Q1 GDP to moderate to 7.1% y/y from 7.3% in the last quarter. We project IP, FAI and retail sales to improve slightly but remain weak on a quarterly basis, consistent with our Q1 GDP forecast", added Barclays