Why Singapore's May NODX figures were 'distorted'

But IP was surprising.

According to DBS, industrial production for May did surprise on the upside, at least from the market’s perspective. The headline number registered a 2.1% YoY (1.2% MoM sa) increase.

Though this is lower than forecast for a 3.3% increase, the final outcome is much stronger than a mere 0.1% increase envisioned by consensus.

Here's more from DBS:

Plainly, the market appeared overly concerned with the poor non-oil domestic export performance in the same month. The NODX contracted 4.6% YoY and fell 1.1% MoM sa and that probably accounts for the relatively conservative estimates that have been put up.

But as we’ve highlighted previously, May’s NODX was distorted by a mix of base, price and currency effects. That explains why we had placed our bet on the PMIs instead.

The latest May PMI figures are in fact showing sustained expansion in production output.