Backed by strong earnings results and the resumption of US-China trade talks, US indices climbed broadly higher overnight.

Among the 18% of S&P 500 companies that have announced 2Q results so far, 78% of them have beaten analysts’ forecast with an average earnings growth of 3.2% year-on-year. This smashed earlier forecasts of a -3% earnings downgrade. Materials (+1.99%), industrials (+1.24%) and financials (+1.14%) were leading the benchmark whereas utilities (-0.61%), energy (+0.27%) and communications (+0.30%) were trailing.

Share prices of technology giants Facebook, Google and Amazon fell sharply during after-hours trading as Washington had the Department of Justice (DoJ) open investigations into leading internet players over ‘reduced competition, stifled innovation or otherwise harmed consumers’.

US trade Representative Robert Lighthizer and his team is heading to Beijing next Monday for a face-to-face talk with their Chinese counterparts. This is viewed as an icebreaker since the negotiation process broke down at the end of May, even though there is little clue to support any material change in the progress of the talks.

EUR/USD tumbled for a third day against the greenback and traded at 1.1146 this morning, as traders attempted to price-in the European Central Bank (ECB)‘s interest rate cut as soon as this Thursday. According to the futures market, the likelihood of a 10bps cut is standing at 37%. The probability of a rate cut by the end of 2019 is at above 90%.

Low inflation and weak economic data suggest that further interest rate cuts and a stimulus plan is necessary, even though it comes at a cost of pushing the benchmark rate deeper into negative territory. Technically, EUR/USD is seeing immediate support level at 1.1129 area. Tomorrow’s ECB meeting will probably lead to heightened volatility in euro pairs but given the fact that the markets have taken actions in advance, further downside is probably limited.

In Singapore, the Straits Times Index (STI) climbed 10 points to 3,383 points on Wednesday. Banks, technology, consumer staples and real estate were among the outperformers. Despite recent weak economic data, Singapore’s benchmark index remains resilient as expectations for the Monetary Authority of Singapore’s easing policy is on course for rising. Technically, the STI is attempting to breakout a key resistance level at 3,390. This week, HPH trust and Jardine C&C will report their earnings.

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