Singapore’s shares may get a sentiment boost from Wall Street gains and a strong opening rally in Japan shares amid news of trade talks with the U.S. and as the yen weakened.
On Wednesday, Japan agreed to open bilateral trade talks with the U.S., which the Asian nation had resisted as it tried to bring the U.S. back into the Trans-Pacific Partnership instead.
Japan’s Nikkei 225 index opened up 1.16 percent, rising solidly for a second day, while South Korea’s Kospi was down just 0.11 percent in early trade on Friday.
The Straits Times Index ended Thursday down 0.09 percent at 3236.26; October futures for the index were at 3240 at Thursday’s close, while November futures were at 3243 and December futures were at 3241.
Hong Kong’s Hang Seng Index shed 0.36 percent to 27,715.67 by Thursday’s close, while China’s CSI 300 lost 0.40 percent to 3403.59.
Indonesia’s IDX Composite rose 0.95 percent to close at 5929.22.
The Dow Jones Industrial Average was up 0.21 percent at 26,439.93 at Thursday’s close, the Nasdaq Composite tacked on 0.65 percent to 8041.968 and the S&P 500 gained 0.28 percent to 2914.00. Futures for the three indexes were slightly higher in early trade.
The U.S. dollar index was at 95.02 at 7:48 A.M. SGT, after rising steadily from as low as 94.27 early in the session, according to ICE futures data.
The 10-year U.S. Treasury note yield was at 3.049 percent at 7:59 A.M. SGT after rising from as low as 3.034 percent to as high as 3.073 percent in Thursday’s session before retreating, according to Tullett Prebon data.
“It was the day before quarter (and month) end and all was……not making a lot of sense,” Chris Weston, head of research at Pepperstone Group, said in a note on Friday.
“That is often the case on a day where portfolio rebalancing and other variances of technical flows are at hand. So, when we see the U.S. dollar having its best one-day gain (up 0.8 percent) since 10 August, and breaking the downtrend seen since mid-August, materialising amid a backdrop of modest equity and rates appreciation, with limited change in U.S. Treasurys, naturally we have to question this move,” he added.
The euro/dollar was at 1.1637 at 8:03 A.M. SGT after falling from as high as 1.1757 to as low as 1.1636 in Thursday’s session, according to DZHI data.
Boris Schlossberg, managing director of foreign-exchange strategy at BK Asset Management, said the euro’s fall was on reports that Italy’s government would delay its budget meeting while working on final details.
“Markets have been keeping a close eye on Italy’s budget which is expected to come in at only 2 percent deficit, well within the EU limits. However, the newly elected populist government has been pushing for higher deficit targets as it seeks to stimulate the moribund Italian economy,” Schlossberg said in a note on Thursday.
“The tug of war within the Italian cabinet has created jitters in the currency market, as Italy with its gigantic 130 percent debt to GDP ratio poses a sovereign debt problem for the entire region if the country’s yields begin to diverge markedly from the core,” he added.
Dollar gains against yen
The dollar/yen was at 1.1397 at 8:04 A.M. SGT after spiking higher from as low as 112.53 to as high as 113.468 in Thursday’s session, according to DZHI data.
The dollar/yuan ended Thursday at 6.8879 as the yuan weakened from Wednesday’s close of 6.8762, after trading in a 6.8677 to 6.8910 range during the session, according to DZHI data.
The dollar/Singapore dollar was at 1.3681 at 8:07 A.M. SGT after trading in a 1.3637 to 1.3681 range on Thursday, according to DZHI data.
The dollar/Indonesian rupiah ended Thursday at 14,912 after trading in a 14,880 to 14,925 range, according to DZHI data.
Nymex WTI crude oil futures for November were up 0.06 percent at US$72.16 a barrel at 7:35 A.M. SGT, while ICE Brent crude oil futures for November were up 0.47 percent at US$81.72 a barrel at 4:48 A.M. SGT, according to data from Bloomberg.