The US dollar index June future jumped 0.45% yesterday evening after the Federal Reserve decided to keep its target interest rate unchanged at 0.75-1.00%, in a move widely expected by market participants.

The Fed also expressed optimism about the future economic outlook, despite growth in economic activity slowing in recent months. They saw the slowdown as transitory, and they are ready to gradually adjust their monetary policy stance in response to changes in price levels and job gains.

This statement paved the way for further rate hikes as soon as June. The likelihood of a quarter percent rate hike in June, according to CME FedWatch Tool, is now standing at 71.6%.

This Friday’s US nonfarm payroll data will be carefully watched by policymakers and market participants to assess the jobs market. The market anticipates 185k new jobs created in the month of April, compared to a very disappointing 98k in the previous month.

Big earnings sent the STI to its highest level since August 15

Singapore’s Straits Times Index soared for a second day to its 21-month high of 3,237 points. The strong rally was backed by solid corporate earnings, especially in the banking sector.

Both UOB and DBS have given us positive earnings surprises in the first quarter of this year. Higher profits were attributed to both interest income and fees income. Banks are benefiting from both cyclical economic tailwinds as well as the ‘Trump effect’. A strong surge in trading volume has been observed since the November election, with revived global economic tailwinds and Trumponomics delivering a positive influence on the stock market.

DBS, for example, is benefiting from the Trumponomics effect, as its wealth management fees rose 26% and investment banking fees doubled. Its share prices soared 4.6% and closed at $20.53 yesterday.

US Dollar Index June 2017

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