Singapore market trends Thursday: US political chaos, Fed minutes eyed

Singapore one dollar bill

Singapore shares may meander on Thursday after being closed for a holiday on Wednesday, with traders digesting Federal Reserve minutes released overnight and the political chaos in the U.S. after one of President Trump’s close confidantes implicated him in a crime.

Read more: Singapore stocks to watch Thursday: Wilmar, CapitaLand Mall Trust, Sembcorp, Keppel REIT

Trump’s former attorney and fixer, Michael Cohen, pleaded guilty on Tuesday to tax fraud and campaign finance violations, saying he acted at the direction of a candidate; Cohen’s attorney, Lanny Davis, later said the candidate was Trump and added that Cohen has information of interest to Special Counsel Robert Mueller in his investigation into whether the Trump campaign might have conspired with Russia to influence the election. Trump denied Cohen’s claims.

On the same day, Trump’s former campaign chief Paul Manafort was convicted of eight of 18 charges of tax and bank fraud. Trump said he felt badly for Manafort and his family.

But that didn’t appear to shake markets much.

“Global markets are largely shaking off U.S. political drama including Cohen’s and Manafort’s convictions,” Scotiabank said in a note on Wednesday. “It’s never clear that short-term markets are the best judges of evolving political risk that may be further informed if Cohen’s lawyer is on the mark in indicating that his client has further knowledge of Russian conspiracy.”

Fed minutes

Minutes from the U.S. Federal Reserve’s 31 July-1 August meeting showed the central bankers discussed raising interest rates soon, but were also concerned about the risks of the U.S. trade war to the economy.

“It’s unlikely that we’ll witness any quantum shifts in Fed thinking this close to Jackson Hole and ahead of the full forecast update on September 26th,” Scotiabank said. “One clue to this effect is that the statement following the meeting was a total yawner and included only
minor wording alterations that were factual and trivial in nature.”

Japan’s Nikkei 225 index was up 0.20 percent in early trade.

The Straits Times Index closed down 0.15 percent at 3199.89 on Tuesday; the market was closed on Wednesday for the Hari Raya Haji holiday. August futures for the index were at 3200 on Tuesday, while September futures were at 3201.

On Wednesday, the Dow Jones Industrial Average ended down 0.34 percent at 25,733.6, the Nasdaq was up 0.38 percent at 7889.097 and the S&P 500 edged down just 0.04 percent to 2861.82.

The CSI 300 index ended Wednesday down 0.56 percent at 3307.955, while Hong Kong’s Hang Seng Index was up 0.63 percent at 27,927.58.

Currencies

The U.S. dollar index was at 95.17 at 7:43 A.M. SGT, off highs of 95.37 touched on Wednesday and as high as 96.73 earlier this month, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 2.823 percent at 7:54 A.M. SGT, after trading as low as 2.814 percent and as high as 2.833 percent overnight.

The euro/dollar was at 1.1582 at 8:07 A.M. SGT after trading it a 1.1552 to 1.1623 range overnight, but still well above the low of around 1.13 touched last week, according to DZHI data.

“With no major U.S. or Eurozone economic reports released in the front of the week, the euro’s gains were driven by dollar dumping and short covering. Today’s move above 1.16 was caused by President Trump’s latest political troubles, but investors pushed their concerns aside quickly,” Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said in a note on Wednesday U.S. time.

“If the possibility of a sitting president being indicted for violations can’t keep the dollar down, it seems nothing will,” she said.

The dollar/ yen was at 110.579 at 8:09 A.M. SGT, after trading in a 110.0 to 110.617 range overnight, according to DZHI data.

The dollar/yuan closed at 6.8399 on Wednesday after trading as high as 6.9347 last week.

The Singapore dollar retreated slightly, with the dollar/Sing at 1.3683 at 8:10 A.M. SGT, after trading as low as 1.3640 earlier in the week.

Oil

Nymex WTI crude oil futures for October were up 0.21 percent at US$68.00 a barrel at 8:00 A.M. SGT, while ICE Brent crude oil futures for October were flat at US$74.78, according to Bloomberg data.

Read more: U.S. crude oil prices higher ahead of Asian trade

 

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