Singapore’s June non-oil domestic exports rose 20.7% year on year, while first-half 2026 growth ran at 18.6%, outpacing the government’s 3–5% full-year forecast. Electronics shipments were framed as being supported by AI-driven semiconductor demand, with the broader electronics upcycle linked to continuing capex plans from hyperscalers and cloud service providers. USD/SGD was indicated near 1.2910.
Non-electronics exports were described as facing tariff-related headwinds, although the expected impact was tempered by projections that most economies will be subject to a baseline 10% tariff on shipments to the US. The outlook referenced ongoing AI infrastructure spending as a support for electronic exports, potentially offsetting supply chain disruptions in the chemical sector, alongside the prospect that clearer trade policy and easing Middle East tensions could underpin a recovery in non-electronics flows.
Singapore Dollar Strength and Derivative Strategies
USD/SGD is currently trading near 1.2910, pushed down by Singapore’s massive 20.7% year-on-year June export growth. We advise derivative traders to position for further Singapore Dollar strength by buying USD/SGD put options or shorting USD/SGD futures in the coming weeks. With first-half export growth at 18.6%, vastly outperforming the official 3% to 5% forecast, the Monetary Authority of Singapore has strong fundamental support to keep its currency on an appreciation path.
Capturing the Electronics Upcycle and Hedging Trade Risks
The unstoppable momentum in AI-related semiconductor demand suggests we should also go long on technology and electronics derivatives. Historically, global chip sales have surged during major tech upcycles—often growing by over 20% in similar expansion phases—and current capital expenditure from major cloud providers mirrors this trend. We recommend utilizing bull call spreads on technology-linked derivatives to capture this sustained electronic sector momentum while limiting upfront premium costs.
Meanwhile, we must hedge against potential trade headwinds, particularly with a baseline 10% tariff on shipments to the US looming over non-electronic sectors. Derivative traders should buy protective puts on Singapore’s industrial and chemical sector options to buffer against localized supply chain disruptions. Balancing our long electronics positions with these targeted hedges will help us navigate the expected tariff volatility as global trade policies solidify in the second half of the year.
