In November, Singapore’s industrial production dropped to -10.2% from a previous 11.5%. This decline suggests challenges in the manufacturing sector, potentially affected by global economic conditions and possibly impacting Singapore’s economic outlook.
Market Overview
Various updates were discussed, including the USD/CAD’s proximity to five-month lows due to BoC-Fed policy differences, and gold prices retreating from highs amid profit-taking. Additionally, the Pound Sterling slightly declined amid subdued holiday trading, while the S&P 500 forecast for 2026 suggests growth.
Further highlights include EUR/USD stabilising below 1.1800, GBP/USD staying around 1.3500 in quiet markets, and gold trading below $4,500. Bitcoin decreased below $87,000 due to intensified ETF outflows and reduced whale participation. The economic outlook for 2026-2027 forecasts solidity in advanced countries, while Avalanche faces hurdles near $12 amid Grayscale’s ETF form update.
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Given today’s date of December 26, 2025, we must react to the sharp reversal in Singapore’s industrial production, which cratered to -10.2% in November after a strong 11.5% reading in October. This unexpected drop signals a significant weakening in the manufacturing sector and is a bearish indicator for the Singapore Dollar. The volatility suggests that underlying global demand, on which Singapore’s economy depends, may be faltering heading into the new year.
This negative data is supported by recent figures showing that Singapore’s non-oil domestic exports (NODX) also fell by a surprising 12% year-over-year in November, with electronics exports being particularly weak. We also see that China’s latest Caixin Manufacturing PMI for November dipped to 49.5, indicating a contraction and reinforcing concerns about a regional slowdown. These factors combined create a challenging outlook for Singapore’s export-driven economy.
Strategic Approach
Looking back, we have seen such volatile industrial production figures before, especially during the supply chain disruptions of 2022 and 2023, but the speed of this reversal is alarming. The sharp pivot from strong growth to deep contraction in just one month suggests that earlier optimism was misplaced. This is a clear signal to hedge against further downside risk in Singapore-linked assets.
For derivatives traders, this presents an opportunity to position for a weaker Singapore Dollar in the coming weeks. We believe buying call options on the USD/SGD currency pair is a prudent strategy, allowing for potential upside if the SGD weakens further against the US dollar. This approach offers a defined-risk way to capitalize on the negative economic sentiment.
On the equity side, the Straits Times Index (STI) is likely to face downward pressure, particularly in the manufacturing and industrial sectors. We should consider buying put options on an STI-tracking ETF to profit from a potential market decline. This strategy provides a hedge for existing long positions or a direct speculative bet on a downturn.
However, we must be mindful that we are trading in holiday-thinned markets, which can lead to low liquidity and exaggerated price movements. It is crucial to manage risk by using smaller position sizes than usual. This will help protect against any sudden and unexpected market reversals common during the final trading week of the year.
