Singapore market trends Monday: North Korea summit and G-7 trade tensions eyed

The skyline in Singapore’s central business district.The skyline in Singapore’s central business district.

Singapore shares were likely to struggle to find direction on Monday, with a tough battle for attention as the North Korea-U.S. summit was set to kick off even as school holidays and the World Cup were already sapping interest.

Singapore stocks to watch Monday: Thai Beverage, CapitaLand, First Sponsor, Frasers Logistics

“The Trump -Kim summit is the massive event that has a far-reaching regional implication,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Monday. “If the talks somehow go sideways, there could be a reasonably aggressive regional risk-off move.”

The Dow Jones Industrial Average ended Friday up 0.30 percent, while the S&P 500 added 0.31 percent and the Nasdaq edged up 0.14 percent. Futures for the three indexes were nose down early Monday.

In Japan, the TOPIX index was up just 0.06 percent at 8:16 A.M. SGT, while the Nikkei 225 was off 0.02 percent at 8:18 A.M. SGT.

The Straits Times Index ended Friday down 1.06 percent at 3436.37; June futures were at 3438 on Friday.

Scotiabank said the U.S. influence would permeate global markets this week.

“It starts with a lot of debt being taken down at auction, proceeds to Tuesday’s U.S.-North Korea Summit, Wednesday’s FOMC meeting, another batch of consumer and inflation updates over the middle of the week and then ends with potential U.S.-China tariff fireworks. The conclusion of the G-7 Summit in Quebec, Canada may offer additional fireworks into the Monday market open,” it said in a note on Friday.

The G-7 proved acrimonious and dramatic, far from the meeting’s usual boring demeanor, as U.S. President Trump feuded with allies and threatened fresh tariffs on auto imports after calling for other nations to remove tariffs. Trump also withdrew U.S. support for the G-7 communique after Canadian Prime Minister Justin Trudeau made an unusual show of anger from his country and criticized Trump policy, spurring Trump’s decision to take his ball and head to Singapore.

Scotiabank added that the U.S. May consumer price index, due Tuesday, could be “a doozy,” with its estimate for inflation to rise to 2.9 percent in May from April’s 2.5 percent, mainly on rising gas prices.

Currencies

The dollar index, which measures the greenback against a basket of currencies, was at 93.50 at 7:57 A.M. SGT, down from levels as high as 93.81 on Friday.

The euro was at US$1.1783 at 8:09 A.M. SGT, off levels as high as US$1.1834 touched last week, but above levels as low as US$1.1734 on Friday.

“Fears over Italy’s populism and Euroscepticism have temporarily receded,” DBS said in a note on Friday. “Even so, we don’t expect the euro to appreciate above US$1.20 again. Markets may be too hasty in bringing forward ECB rate hike expectations into 2019.” It noted that continued fears over Italian politics and widening U.S. trade tensions were likely to keep the ECB cautious on when it will end its asset purchases. 

The Singapore dollar was a tad weaker compared with Friday, with the U.S. dollar fetching S$1.3350 at 8:28 A.M. SGT, compared with Friday’s low of S$1.3325, according to DZHI data.

Oil prices

Nymex WTI crude oil futures for July were down 0.29 percent at US$65.55 a barrel at 7:57 A.M. SGT, while ICE Brent Crude futures for August were down 0.18 percent at US$76.32 at 7:28 A.M. SGT, according to Bloomberg data.

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