Singapore market trends Thursday: NAFTA optimism may spur shares higher

Singapore one dollar bill

Continued optimism over what appears to be a tamping down of the U.S. trade war may help bolster Singapore shares on Thursday, after Wall Street reacted positively to developments in NAFTA negotiations.

“The financial markets and the record breaking levels in U.S. stocks tell us that investors are pleased with the recent developments.  Particularly the fact that the U.S. reached a trade deal with Mexico, talks with Canada are going well and the EU is willing to work with the U,K.,” Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said in a note on Wednesday, U.S. time.

“It remains to be seen whether these talks will turn into paper agreements, but the hope that it will has enough to drive currencies and equities sharply higher,” she added.

Japan’s Nikkei 225 index was up 0.46 percent in early trade on Thursday.

The Straits Times Index ended Wednesday down 0.11 percent at 3243.92; August futures for the index were at 3243 on Wednesday, while September futures were at 3244.

Hong Kong’s Hang Seng Index ended Wednesday up 0.23 percent at 28,416.439, while China’s CSI 300 was down 0.4 percent at 3386.573.

The Dow Jones Industrial Average ended Wednesday up 0.23 percent at 26,124.57, the Nasdaq tacked on 0.99 percent to 8109.688 and the S&P 500 added 0.57 percent to 2914.04. Futures for the three indexes were a tad down early Thursday.

Shares in the U.S. got an additional fillip from solid gross domestic product (GDP) data on Wednesday, with second-quarter growth revised slightly higher to 4.2 percent annualized from 4.1 percent previously, the fastest pace since the Obama administration.

Chris Rupkey, chief financial economist at MUFG Union Bank, said the data support the Federal Reserve’s case for one or two more rate hikes this year.

“Rate hikes are dependent on the economy and right now the economy’s good fortune is giving Fed officials the green light to take away the emergency stimulus left over from the recession and financial crisis a decade ago. There is no need for monetary policy to remain stimulative with interest rates below normal levels this long into an economic expansion,” Rupkey said in a note on Wednesday.

Currencies

The U.S. dollar index, which measures the greenback against a basket of currencies, was at 94.52 at 8:12 A.M. SGT, after trading as high as 94.90 on Wednesday, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 2.88 percent at 8:16 A.M. SGT after touching levels as high as 2.896 percent on Wednesday, according to Tullett Prebon data; bond prices move inversely to yields.

The euro/dollar was at 1.1705 at 8:24 A.M. SGT after trading in a 1.1651 to 1.1710 range on Wednesday, well off its low of 1.13 touched earlier this month, according to DZHI data.

The dollar/yen was at 111.71 at 8:25 A.M. SGT, after trading in a 111.09 to 111.829 range on Wednesday, according to DZHI data.

The Singapore dollar held fairly steady; the dollar/Sing was at 1.3652 at 8:26 A.M. SGT, after trading in a 1.3624 to 1.3679 range on Wednesday, according to DZHI data.

Oil

Nymex WTI crude oil futures for October were up 0.22 percent at US$69.66 a barrel at 8:03 A.M. SGT, while ICE Brent crude oil futures for October were up 0.19 percent at US$77.29, according to Bloomberg data.

Read more: Crude prices up Thursday ahead of Asia session

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