Singapore market trends Wednesday: US dollar and yields retreat from highs

Singapore’s National Libary and shophouses

Singapore’s shares may get some relief on Wednesday as the U.S. dollar and Treasury yields retreated from highs, while potential signs of more political chaos in the U.S. got a shrug.

The U.S. ambassador to the United Nations, Nikki Haley, abruptly resigned on Tuesday, in a move that appeared to catch the White House by surprise.

“Markets saw her as a voice of reason within the U.S. administration where it sometimes appears gut feel or Twitter tirades drives foreign policy,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Wednesday.

The U.S. trade war on China got some headlines on Tuesday as well, with U.S. President Trump repeating his threat to impose tariffs on another US$267 billion of Chinese imports if China retaliates against previous rounds of U.S. tariffs.

Indexes

Japan’s Nikkei 225 index opened up 0.16 percent, while South Korea’s Kospi edged up 0.11 percent.

Singapore’s Straits Times Index ended Tuesday down 0.47 percent at 3166.60; October futures were at 3167 on Tuesday, while November and December futures were at 3172 and 3169 respectively.

Hong Kong’s Hang Seng Index shed 0.11 percent to 26,172.91 on Tuesday, while China’s CSI 300 edged down 0.07 percent to 3288.691.

The IDX Composite ended Tuesday up 0.62 percent at 5796.79.

The Dow Jones Industrial Average lost 0.21 percent to 26,430.57, the Nasdaq Composite edged up 0.03 percent to 7738.016 and the S&P 500 slipped 0.14 percent to 2880.34. Futures for the three indexes were nose up in early trade.

Currencies

Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, called currency movements Tuesday “a rollercoaster ride,” with currencies rebounding after touching fresh lows at the start of the New  York session.

But she added that nothing specific triggered the reversal, with no U.S. economic reports released. However, the euro’s pop came right after the time many options expire, she said.

“This coincided with the unexpected resignation by U.N. Ambassador Nikki Haley so it is not clear whether investors perceived her resignation as a lack of confidence in the Trump Administration or it was all option related flow. Either way, option expirations and Haley’s resignation should only have a short term impact on currencies,” Lien said in a note late on Tuesday, U.S. time.

Dollar index retreats

The U.S. dollar index was at 95.59 at 7:46 A.M. SGT after spiking up as high as 96.14 during Tuesday’s session, according to ICE futures data.

The 10-year U.S. Treasury note yield was at 3.215 percent at 7:57 A.M. SGT after spiking as high as 3.263 percent in Tuesday’s session, according to Tullett Prebon data.

The euro/dollar was at 1.1503 at 8:01 A.M. SGT after trading in a 1.1429 to 1.1503 range on Tuesday, according to DZHI data.

The dollar/yen was at 112.98 at 8:02 A.M. SGT after trading in a 112.84 to 113.392 range on Tuesday, according to DZHI data.

The dollar/yuan ended at 6.9216 on Tuesday after trading in a 6.9071 to 6.9289 range during the session, marking the pair’s spike higher this week from levels around 6.8650 last week, according to DZHI data.

The dollar/Singapore dollar was at 1.3817 at 8:04 A.M. after trading in a 1.3817 to 1.3872 range on Tuesday, according to DZHI data.

The dollar/Indonesian rupiah closed Tuesday at 15,225 after trading in a 15,205 to 15,253 range during the session, according to DZHI data.

Oil

Nymex WTI crude oil futures for November were down 0.29 percent at US$74.74 a barrel at 7:26 A.M. SGT, while ICE Brent crude oil futures for December were up 1.30 percent at US$85.00 a barrel at 5:59 A.M. SGT, according to Bloomberg data.

Read more: Crude mixed Wednesday in Asia as Hurricane Michael strengthens

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