March US nonfarm payroll increased by 215k, beating market expectations of 205k, and Moody's downgraded the credit outlook of DBS, OCBC and UOBMarch US nonfarm payroll increased by 215k, beating market expectations of 205k. The unemployment rate was little changed at 5.0%. New jobs were mainly added in the retail trade, construction and healthcare sectors, whereas job losses occurred in the manufacturing and mining sectors. This month's job data, together with strong job growth over the last few months, will help to maintain investor's confidence in the US economy and reduce worries of a recession. The Dow Jones finished 0.61% higher to 17,792, getting close to its 4-month high. However, this is likely to have limited impact on the market's expectation of 2 rate hikes this year, in the wake of comments from Yellen and other FOMC members earlier last week. Much stronger job growth numbers and rising inflation is probably needed to put pressure on the Fed to raise rates faster. In Singapore, Moody's has downgraded the credit outlook of the three local banks, namely DBS, OCBC and UOB to negative from stable. Meanwhile, Moody's maintained their current credit ratings unchanged at high investment grade Aa1 (for their long-term local and foreign currency deposit ratings). The reason is that Moody's expects that a more challenging environment against the backdrop of slower economic and trade growth in 2016 will put pressure on the banks' asset quality and profitability. Despite this action, the Aa1 rating is still the second highest behind Aaa and their ratings are still the highest among Asia. This is not totally surprising in light of decelerating economic growth within the country as well as in the region. This also reminds us that recently both China and Hong Kong's credit ratings were adjusted negative earlier in March this year. However, the stock price of the three local banks has been corrected significantly (down 25-30% from the 2015 peak) due to rising concerns about their exposure to the Oil and Gas industries as well as China's slowdown. Therefore a lot of expectations have already been more or less priced-in. The credit rating outlook serves as more of a reminder or a delayed indicator. US 30 – Cash Key Technical levels to watch: Immediate resistance levels: 18,000-18,350 Immediate support levels: 17,127-16,475 20 day and 50 day moving averages are slopping up, whereas 200 day moving average is sloping down MACD dead cross formed – momentum has slowed down
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