Market opinion divides
Asian and European markets rebounded on Tuesday, erasing the fear and losses earlier. However, there are divided opinions towards an impending interest rate hike. Analysts pointed out that the August non-farm payrolls data have missed the consensus estimates for the past five years.
US Non-farm payroll release
If the Non-farm payrolls miss expectations again this month, enthusiasm on the September rate hike will dampen, and the dollar’s rally will probably pause. The future-implied odds of a 25bps rate hike in September dropped to 34% from 42% just one day ago.
On the other hand, FX market movements demonstrated an opposite view. US dollar advanced 0.55% against a basket of its major currency peers last night, reflecting a supportive stance towards immediate rate hike. USD/JPY soared to 103.00 - the highest level in one month.
US Dollar Index Sep 2016
Singapore stocks continue to range
Singapore markets opened higher on Tuesday but subsequently erased the gains during the afternoon trading session. Weaknesses mainly originate from SingTel, Oil & Gas names and the Airline sector. The surging number of Zika cases across the tropical Southeast Asia region is likely to weigh on tourism and travelling volumes in the region, rendering aviation and retail sectors susceptible to this headwind should the mosquito-borne virus continue to escalate.
Singapore has reported over 40 locally-transmitted cases on Sunday and the local authorities have announced that they are anticipating more emerging cases. Other parts of Southeast Asia have also recorded dozens of cases.
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