Singapore market trends Monday: Positive leads from Wall Street, Japan despite trade salvos

Singapore 50 dollar bill

Singapore shares will open on Monday with positive leads from regional markets and Wall Street, despite the U.S. last week carrying through with its trade war threats, with China retaliating.

But local concerns over fresh property cooling measures will leave Singapore’s traders watching to see if Friday’s sharp selloff will be extended.

Singapore stocks to watch Monday: SGX, Hyflux, Yangzijiang, Oxley, Asiatravel.com

Stephen Innes, head of Asia Pacific trading at OANDA, said that traders will also be focused on China’s data dump later this week.

“While U.S.-Sino Trade will continue to dominate the headline ticker tape, this week’s critical set of growth data will be a massive test for local markets. Frankly, by all metrics, growth in China remains more than adequate, but a subpar reading and Main Street might eventually take notice and realise all is not well in China,” he said in a note on Monday.

Japan’s Nikkei 225 Index opened up 0.95 percent on Monday.

The Dow Jones Industrial Average ended Friday up 0.41 percent, the S&P 500 rose 0.85 percent and the Nasdaq gained 1.34 percent. Futures for the three indexes were higher early on Monday.

The Straits Times Index ended Friday down 1.99 percent at 3191.83; July futures for the index were at 3173 on Friday, while August futures were at 3141.

In a note published before the Singapore government introduced a fresh round of property cooling measures, DBS had set its STI year-end target at 3650 in its base case, and 2915 in a bear case of an “all-out” trade war.

On Friday, China’s Shanghai Composite ended up 0.49 percent, while Hong Kong’s Hang Seng Index was up 0.47 percent.

Currencies

The dollar index, which measures the greenback against a basket of currencies, was at 93.97 at 8:04 A.M. SGT after trading as high as 94.40 on Friday.

The 10-year U.S. Treasury note yield was at 2.834 percent at 8:16 A.M. SGT, compared with levels as high as 2.847 percent on Friday.

The slump in the dollar and bond yields came after U.S. jobs data on Friday showed that nonfarm payrolls rose by 213,000 in June, higher than expected, while April and May data were revised higher. But the data also showed the unemployment rate ticked up and wage growth remained anemic. Reuters reported that had spurred concerns the U.S. Federal Reserve might not hike interest rates four times this year.

The dollar/yen was at 110.502 at 8:17 A.M. SGT, compared with a 110.35 to 110.786 range on Friday, according to DZHI data.

The euro/dollar was at 1.1751 at 8:18 A.M. SGT, compared with a 1.1679 to 1.1768 range on Friday, according to DZHI data.

The dollar/yuan was at 6.6395 on Friday after trading in a 6.6340 to 6.6645 range, according to DZHI data; that’s well off the spike of as high as 6.7167 early last week.

The Singapore dollar strengthened, with the dollar/sing at 1.3572 at 8:21 A.M. SGT, after spiking as high as 1.3745 last week.

Oil

Nymex WTI crude oil futures for August were up 0.09 percent at US$73.87 a barrel at 7:40 A.M. SGT, while ICE Brent crude oil futures were nearly flat at US$77.12 at 7:40 A.M. SGT, according to Bloomberg data.

UBS raised its oil price forecasts last week amid concerns that supply wasn’t going to be keeping up with demand.

“Oil traders are wholly perplexed by President Trump’s demands to cut off 2.4 million barrels of Iranian oil, while admonishing OPEC to keep prices stable if not have them go down,” OANDA’s Innes said on Monday.

“It’s the White House’s zero-tolerance policy to Iran which is supporting oil markets, given the fragile state of global supplies as spare oil capacity hovers near zero. In this scenario of supply reality versus wishful thinking, there is only one direction for the oil price to move, and that is higher over time,” he said.

World Cup

The World Cup quarter finals brought a weekend of upsets. France ousted Uruguay 2-0 on Friday. Belgium pushed out one-time favorite for the final, Brazil. England beat Sweden 2-0, prompting out-of-control British fans to trash an Ikea. After a 2-2 game, Croatia won against Russia on penalty kicks 4-3.

That’s left the World Cup down to only European teams in the semi-finals.

Traders will be able to get a couple nights’ sleep, with the next game, between France and Belgium, not until Wednesday. It’s England versus Croatia on Thursday.

 

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