Singapore’s Straits Times Index registered its longest bull strike seen in over two years, surging over 200 points during the past six trading days.

The STI has now come to a resistance level of 3,200 points, and may face some selling pressure around this level in the short term. The 20- and 50-Day Simple Moving Average lines have formed a bullish crossover, and momentum indicator MACD has converged with its price, suggesting there could still be more upside in the weeks to come.

SGX’s recent weekly retail and institutional fund flow report shows that both retail and institutional investors have net bought local shares, with financials, industrials and REITs among the more popular sectors.  

Sharp rebound in crude oil prices last week was one of the key drivers behind the rally of Singapore’s benchmark index. Brent Crude oil prices are now facing a resistance level of US$60 per barrel and is consolidating at around this level.  OPEC+’s commitment to slash output by 1.2 million barrels a day starting from this year has shown positive impact on oil prices and brought global supply and demand into balance. The latest DoE Petroleum Status report showed 1.68 million barrels drop in US commercial crude inventory, the biggest weekly drop seen in more than a month, albeit still below market expectation of 3.5 million drop. 

Today, China’s trade balance data will be under the spotlight. Markets expect further slowdown in the country’s export and import growth in US dollar terms following a sharp decline in growth last month. The ‘frontload’ effect starts to diminish and the adverse impact of US trade tariffs starts to emerge. Reuters forecasts the growth of import and export to slow down to 3% and 5% respectively, from double-digit growth forecast seen last month. A worse-than-expected reading could set a sour tone for global equities to start the week.

The fast cooling of China’s factory gate price PPI data also suggests the deflationary risk ahead of us, as PPI is widely viewed as a leading indicator of inflation or CPI numbers. China’s Dec PPI came in at 0.9% last week, below consensus forecast of 1.6% and registered its lowest level since October 2016. This allowed central banks more room to carry out monetary and fiscal stimulus to stabilise the economic growth as well as price levels.

China Exports – YoY

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