Asian markets are set to open broadly higher following an upbeat US session overnight. China’s reserve requirement ratio was cut as trade optimism further boosted sentiment, while a string of improving manufacturing PMI readings across the Asean region led to beliefs that a cyclical recovery is around the corner.

Some further improvement in Singapore’s manufacturing PMI is expected in December, as factory output, exports and new orders have grown modestly across the Asean and India region. There is a concern is that the pace of expansion is insufficient to make a solid turnaround in falling backlogs, employment and inflation; which suggest the road towards a full recovery will remain challenging.

The Singapore market registered a strong performance on Thursday, and is likely to continue the upward trajectory today following a strong lead in US markets overnight. In 2019, the local market has been over-punished by trade uncertainty and an economic slowdown, causing it to underperform compared to its global peers.

Hong Kong’s retail sales is forecasted to contract by 25.5% year-on-year, a further deterioration from October’s reading of -24.3%. A recession is underwayg in Hong Kong and is likely to deepen further. Retailers have suffered a poor Christmas period due to a sharp decline in tourism arrivals this year. Since the government protests first started in April, visitor numbers have collapsed. October’s arrival numbers tumbled by 43.7% from a year ago.

The Hong Kong stockmarket, however, is defying gravity. PBoC’s RRR cut has boosted Hong-Kong-listed Chinese financial firms; namely banks, brokerages and insurance. The Hang Seng Index has broken out a key resistance level at 28,6050 and moved decisively higher overnight (see our Hong Kong 50 chart below).

Hong Kong 50 - Cash chart


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.