More headwinds for Singapore retail sales ahead

Singapore's January retail sales came in weaker than expectations at -5.0% y/y (consensus: -0.1%), while less volatile ex-auto sales were weaker still at -8.7% y/y (consensus: -2.3%). 

While the weakness in y/y growth was accentuated by Lunar New Year timing differences - with sales ex-autos rising 2.4% m/m sa - on a trend basis, retail sales have struggled to grow over the past year, weighed by a drop in tourist arrivals which have since failed to recover meaningfully, as well as the property market correction, which has sapped confidence and led to lower sales of furniture and household goods due to lower property transaction volumes. 

Barclays notes as follows:

• More recently, a compounding factor has been the pickup in market interest rates, with 6m SIBOR continuing to climb to new post-financial crisis highs; today it reached 0.98%, up from sub-0.5% last October. These headwinds are likely to continue to weigh on retail sales in the coming months.
  
  
• We do not believe this will prompt the MAS to ease monetary policy further in April.