Singapore firing on all cylinders

Preliminary Q1 GDP data from Singapore were stunningly strong and, as we had expected, encouraged the authorities to tighten monetary policy by allowing the currency to appreciate. Economic growth will almost certainly ease back during the rest of 2010 but the upswing should not come under serious threat. The Singapore dollar should climb further against the US dollar, especially once China allows resumed renminbi appreciation, which we anticipate will happen from mid-year.