Soft US inflation and retail data sent the US dollar down to 94.88 - the lowest level seen since 16 September, as market participants re-assessed the likelihood of an interest rate hike in December. 

Yellen’s dovish statement earlier last week also highlighted concerns over subdued inflation, in spite of the solid jobs market.

The neutral monetary policy outlook continued to support the stock markets. The Dow Jones and S&P 500 indices soared to record highs as earnings season kicked off with positive surprises. Of the 30 S&P500 constituent companies who have released reports so far, 80% have beaten market expectations.
JP Morgan, Citigroup and Wells Fargo reported second-quarter earnings which surpassed consensus by 8%, 6% and 4% respectively. Investors were, however, concerned about lower trading income associated with fixed income, forex and commodities trading amid lower market volatility. Analysts have also reduced the outlook for loan growth and interest income in the second half of the year. As a result, bank shares closed lower last Friday. 

Going forward, if the Trump administration can’t clear the political uncertainties surrounding their reform plans – especially financial deregulation – more unwinding activities will probably be on the way. 


Singapore’s Straits Times Index soared 51 points or 1.6% to 3,287 points – its highest level in two years. Singapore-listed Global Logistic Properties (GLP) finally received a privatisation offer from a management-backed Chinese consortium including Hillhouse Capital management and Hopu Investment management, at a price of S$16bn. 

That translates into an offer price of S$3.38 per share. GLP’s largest shareholder GIC agreed to vote in favour of the offer, making the deal a certainty. GLP’s price soared 22% to S$3.29 on Friday’s close.

Today, China’s Q2 GDP data is scheduled for release at 10am Singapore time. The consensus reading is 6.8%, a slide from the previous quarter’s reading of 6.9% as most economists saw the growth peak in the first half of the financial year. 

The ongoing deleveraging campaign is expected to negatively impact economic growth overall. As PPI growth moderates and the property market cools, export and consumption will become the key pillars for growth in the second half of the year. 

Technical analysis:

US SPX 500 Cash: 

  • Breakout above key resistance level 2,450 
  • SuperTrend (10, 2) has flipped upwards, indicating that the long side is taking control again.
  • 10-Day Simple Moving Average is sloped upwards
  • Next major resistance level could be found at 2,483 area (161.8% Fibonacci)

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