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Uncertainties arise amid a possible trade war No.2

The three US benchmark indices futures finished lower on Independence Day as Wall Street closed. Globally, the European stock markets ended in the red. Asian equities are set to open lower as uncertainties arose following China’s decision to restrict exports of two metals, including gallium and germanium, widely used to make semiconductors for electric cars and other telecom equipment as a retaliation measure against the US and allies to curb the country’s technology advances. This warns of China’s domains in critical resource production for the prevailing AI race among tech companies, sparking concerns about further supply chain disruption amid a possible Trade War No.2.  

The US market open is yet to gauge the sentiment ahead of the FOMC meeting minutes, while the US second-quarter earnings season is approaching. The US dollar index strengthened slightly as the Eurodollar weakened following German trade balance data as the country’s export fell more than expected due to weakened EU members’ demands.

The Reserve Bank of Australia paused rate hikes as the economic outlook gloomed amid the aggressive rate hikes. The ASX rallied following the news, while the Australian dollar bounced off a session low after an initial decline against the king dollar. Futures are pointing to a lower open across Asian equity markets. The Straits Times Index is down 0.25%, the Hang Seng Index futures fell 0.40%, and the Nikkei 225 slid 0.45%.

Price movers:

  • 6 out of 11 sectors in the ASX 200 finished higher in the ASX 200, with Energy and Real Estate leading gains, up 1.16% and 1.08%, respectively. The rebound in Energy stocks may have been due to higher oil prices on Tuesday. And the real estate sector was boosted by the RBA’s rate hike pause. Information technology and industrials were the laggards, down 0.14% and 0.15%, respectively.
  • Meta launches a new app called Threads to compete with Twitter. Threads will be linked to Meta’s Instagram and are available to be pre-order in the Apple App Store and will go live on Thursday. It was the first time the social giant duplicated other social media’s functionality and could potentially gain millions of users from Instagram.
  • Crude oil rebounded from the drop in the previous day as the OPEC+ meeting kicks off today. Traders may bet on more output cut plans by the cartel as Saudi Arabic indicates to extend its 1 million barrels-per-day reductions infinitely if necessary.

SGX announcements/news:

  • UOB (SGX: U11) card signups soar ahead of excitement for Taylor Swift's concert in Singapore. Application rates are up 45% as being a UOB card owner grants concert ticket presale access.

Today’s agenda:

  • Australian Retail Sales for May m/m.
  • China’s Caixin Services PMI for June
  • OPEC Meeting

Watch for the market movements and invest now

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