Singapore market trends Thursday: Trade war worries appear to fizzle

Singapore 50 dollar bill

Singapore’s shares may see a sanguine open on Thursday as the market has appeared to shrug off trade war worries, potentially amid analysts’ expectations that the overall global economy won’t be too badly hurt.

“We need to look no further than risk appetite for an explanation as to why the dollar performed so poorly today. The strong performance of U.S. stocks along and the continued recovery in the Australian dollar tell us that no one is worried about the trade war,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note late Wednesday, U.S. time.

“To the market’s relief this is also the first time that Beijing did not match Washington’s tariffs dollar by dollar (because they can’t),” Lien said.

U.S. President Trump escalated his trade war on China on Monday U.S. time, with plans to impose 10 percent tariffs on US$200 billion worth of imports from China and warned that if China retaliates, he will impose further tariffs on another US$267 billion in imports, effectively all of China’s goods exports to the U.S. The tariffs will start on 24 September and will rise to 25 percent by the end of the year, Reuters reported, citing a senior administration official.

China on Tuesday put retaliatory tariffs on US$60 billion of products imported from the U.S., with the measures also taking effect on 24 September.

Indexes

Japan’s Nikkei 225 index was up 0.11 percent in early trade, while South Korea’s Kospi was up 0.30 percent.

The Straits Times Index ended Wednesday up 1.19 percent at 3176.57; September futures for the index were at 3176 on Wednesday, while October futures were at 3180.

Hong Kong’s Hang Seng Index ended Wednesday up 1.19 percent at 27,407.369, while China’s CSI 300 was up 1.32 percent at 3312.482.

The Dow Jones Industrial Average gained 0.61 percent to 26,405.76 by Wednesday’s close, while the Nasdaq Composite nudged down 0.08 percent at 7950.038 and the S&P 500 edged up 0.13 percent to 2907.95. Futures for the three indexes were slightly higher.

Currencies

The U.S. dollar index was at 94.55 at 8:10 A.M. SGT, off levels as high as 94.71 and as low as 94.32 touched on Wednesday, according to ICE futures data.

The 10-year U.S. Treasury yield was at 3.063 percent at 8:20 A.M. SGT, after touching levels as high as 3.082 percent on Wednesday, according to Tullett Prebon data.

“While everyone thought U.S. bond yields could begin to rise in September as the markets emerged from summer holiday, few could have predicted returns to come on as strong as they did,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note late on Wednesday.

“While last non-farm payroll data produced robust wage growth data, I think its as much a function of hawkish fed speak as anything else,” he added.

The euro/dollar was at 1.1674 at 8:22 A.M. SGT, after trading in a 1.1649 to 1.1715 range on Wednesday, according to data from DZHI.

The dollar/yen was at 112.275 at 8:23 A.M. SGT, after trading in a 112.13 to 112.447 range on Wednesday, according to data from DZHI.

The dollar/yuan ended Wednesday at 6.8465, after trading in a 6.8450 to 6.8658 range during the session, according to data from DZHI.

The Australian dollar was fetching S$0.7265 at 8:29 A.M. SGT, compared with levels as low as S$0.7083 earlier this month.

The Singapore dollar continued its strengthening trend, with the dollar/Sing at 1.3688 at 8:25 A.M. SGT after trading in a 1.3676 to 1.3719 range on Wednesday, according to data from DZHI. The pair is off a high of 1.3815 touched earlier this month.

Oil

Nymex WTI crude oil futures for October were up 0.73 percent at US$71.64 a barrel at 7:50 A.M. SGT, while ICE Brent crude oil futures for November were down 0.08 percent at US$79.34 a barrel at 8:03 A.M. SGT, according to Bloomberg data.

Read more: Crude mixed ahead of Asian open

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