Singapore’s shares may steady on Tuesday on a “no news is good news” mindset, as the Trump administration has so far failed to live up to the threat of imposing fresh tariffs on Chinese imports, likely sparking some hope of a less belligerent outcome for trade talks.
“[I’m] not expecting too much of a reprieve in Asia markets today as risk sentiment in the regions remains on unsure footing. I suspect local investor continue to view the U.S. equities markets safe harbor appeal in a positive light,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Tuesday.
“[The] U.S. equity market continues to climb that trade war wall of worry as U.S. economic fundamentals, and the prospect of higher corporate earnings are just too juicy to ignore,” he said.
Tensions may still be building over the U.S. trade war, but U.S. President Trump hasn’t yet pulled the trigger on tariffs on an additional US$200 billion in Chinese imports, likely spurring some to hope that he will once again back down from one of his overblown threats. Making bombastic threats before settling for much less was the negotiating style that was expounded upon in Trump’s ghost-written books.
The Trump administration reportedly could impose its proposed 25 percent tariff on US$200 billion of Chinese imports in the coming days. Trump has since threatened to impose tariffs on all imports from China, with the mainland set to swiftly retaliate.
Japan’s Nikkei 225 index was up 0.64 percent in early trade, while South Korea’s Kospi was up 0.28 percent.
The Straits Times Index ended Monday down 0.43 percent at 3120.92; September futures for the index were at 3119 on Monday, while October futures were at 3123.
Hong Kong’s Hang Seng Index fell 1.34 percent to end at 26,613.42 on Monday, while China’s CSI 300 lost 1.45 percent to 3230.068.
The Dow Jones Industrial Average ended Monday off 0.23 percent at 25,857.07, while the Nasdaq was up 0.27 percent at 7924.16 and the S&P 500 gained 0.19 percent to 2877.13. Futures for the three indexes were nearly flat in early trade Tuesday.
The U.S. dollar index, which measures the buck against a basket of currencies, was at 95.17 at 8:01 A.M. SGT, after trading as high as 95.54 on Monday, according to ICE futures data.
The 10-year U.S. Treasury note yield was at 2.936 percent at 8:12 A.M. SGT, after climbing as high as 2.950 percent on Monday, according to Tullett Prebon data.
“The dollar has become the destination for safe-haven flows amid the escalation of trade tensions, but also supporting the greenback was the recent batch of economic data,” Hussein Sayed, chief market strategist at FXTM, said in a note on Monday.
He pointed to ISM data showing the manufacturing and service sectors activity grew “faster than most optimistic economists’ predictions,” while job growth was strong and wage growth hit a nine-year high in August.
“The upcoming data this week may also show solid performance for retail sales and consumer inflation. This should further boost expectations for two more rate hikes in 2018, leading to further divergence in monetary policies,” he said.
The euro/dollar was at 1.1594 at 8:14 A.M. SGT after trading in a 1.1525 to 1.1616 range on Monday, according to DZHI data.
The dollar/yen was at 111.155 at 8:15 A.M. SGT after trading in a 110.83 to 111.249 range on Monday, according to DZHI data.
The dollar/yuan ended Monday at 6.8555 after trading in a 6.8418 to 6.8656 range, according to DZHI data.
The Singapore dollar was largely steady, with the dollar/Sing at 1.3792 at 8:16 A.M. SGT after trading in a 1.3774 to 1.3815 range on Monday, according to DZHI data.
Nymex WTI crude oil futures for October were up 0.09 percent at US$67.60 a barrel at 7:32 A.M. SGT, while ICE Brent crude oil futures for November were up 0.70 percent at US$77.37 a barrel at 5:59 A.M. SGT, according to Bloomberg data.