Despite weaker-than-expected US non-farm payroll number, which came at 157k versus 190k consensus, the overall job market remained resilient as the unemployment rate declined by 0.1 percent to 3.9 percent and the y-o-y wage growth hit 2.7 percent.

Previous month’s job numbers were also revised substantially higher. The US dollar Index September contract remained steady at around 95.0 area following the jobs report.

The People’s Bank of China (PBoC) unexpectedly imposed a 20% currency deposit rule on financial institutions when they purchased forex exchange forward contracts – a move that is expected to raise the cost of yuan borrowing substantially in an attempt to stablise the currency after record strike of weekly losses against the greenback since 1994. USD/CNH eased earlier gains and fell to 6.846 area after hitting 13-month high at 6.912 on last Friday. Technically, however, the currency is still in a bearish trend with both of its SuperTrend (10,2) and 10-Dat Simple Moving Average sloping upwards. Central bank’s move is likely to slow down the pace of yuan depreciation and increase two-way movement of the currency. Amidst diverging monetary policy between US and China, however, the outlook of yuan remains weak.

In Singapore, we are halfway through the earnings season and corporates failed to deliver much of positive surprises. Singapore banks announced mixed earnings last and this week, with higher net interest income underpinned lower non-interest items. DBS’s 2Q earnings missed analysts’ forecast by 6%, whereas UOB and OCBC beat forecast by 8% and 11% respectively, according to data compiled by Bloomberg.


  • Overall: beat
  • 2Q net profit surged 16% yoy to S$1.21 billion, driven by strong loan growth and higher net interest margin (NIM)
  • ROE boosted to 12.6% from 11.6% yoy
  • Non-interest income rose 2% yoy, led by wealth management, trade-related and banking fees and commissions
  • Great Eastern Holdings new sales grew 28% to S$327 million
  • Allowance for loans were substantially lower at S$21 milllion compared to S$169 million a year ago. Non-performing loans ratio remained stable at 1.4%
  • Interim dividend increased to 20 cents from 18 cents a year ago


  • Overall – beat
  • EPS S$0.63 vs Est S$0.58
  • 1H net earnings up 24% yoy to S$2.05 billion, driven by strong growth momentum in both net interest income and net fee income
  • Net interest margin improved 9 basis points to 1.83% amidst a rising interest rate environment
  • Broad-based loan growth was 10%
  • Net profit in 2Q rose to S$1.08 billion, 28% y-o-y and 10% higher q-o-q
  • Deposits and gross loans grew 11% and 10% y-o-y to S$228 billion and S$250 billion respectively, with loan-to-deposit ratio at 85.7%
  • ROE improved to 11.6% from 10.2% a year ago
  • Interim dividend increased to 50 cents from 35 cents a year ago
  • Total allowance halved to S$90 million
  • Valuation: 11.8 times trailing P/E, 3.54% trailing 12m dividend yield
  • UOB also announced new strategy to broaden its Digital bank business to ASEAN’s customers so that they can enjoy a full digital experience in banking. This will also enable deeper customer engagement and to scale up its regional franchise across ASIAN markets.

US Non-Farm Payrolls

By Margaret Yang in Singapore

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