5 things to know before the Singapore market opens this week: Jan 4-10

Pedestrians walk past the New York Stock Exchange.
Pedestrians walk past the New York Stock Exchange.PHOTO: BLOOMBERG

1. Singapore kickstarts 2016 with data bang

Global stock markets open on Monday for the first time in 2016 after a dismal end to 2015 and Singapore will start the new year with a trifecta of key economic data releases.

At 8am, the Government's advance estimates for Singapore's gross domestic product (GDP) for the fourth quarter and full-year 2015 will be released. Economists polled by Reuters are expecting economic growth in the October to December quarter to have slowed to 1.3 per cent from 1.9 per cent in the third quarter. For full-year 2015 GDP, the median forecast has dropped to 1.9 per cent from 2.2 per cent previously, according to the latest quarterly poll by the Monetary Authority of Singapore (MAS) last month. The Government's official forecast is for growth "close to 2 per cent".

At 8.30am, the Urban Redevelopment Authority (URA) releases its preliminary private residential property index for the fourth quarter of 2015. Prices of private homes have already fallen for eight consecutive quarters - the longest losing streak in 13 years - and analysts say the decline is likely to continue considering that curbs are unlikely to be lifted anytime soon.

At 9pm, the December purchasing managers' index (PMI) for Singapore's manufacturing sector will be released. Factory activity here has already contracted for five straight months to November on slowing global demand.

2. Oil likely to jump on fresh Middle East tensions

If friction between Saudi Arabia and Iran persists, in addition to attacks on targets such as embassies, look for oil's first move of 2016 to be a jump.

A furor has erupted in both countries, and across the region, after Saudi Arabia executed a Shi'ite cleric, provoking outrage from Iran. The execution was followed by an attack on the Saudi Embassy in Tehran, prompting Riyadh to sever ties.

3. US jobs and Fed minutes in focus

It is also a big week for US data. Friday's jobs report should reveal that 2015 closed out on a strong note, with December non-farm payroll growth of 225,000, according to Bank of America Merrill analysts. That would result in a total annual gain of 2.53 million or an average monthly increase of 211,000, marking the strongest two years of job creation since the late 1990s. The unemployment rate should hold steady at 5 per cent.

Manufacturing in the world's biggest economy contracted in December at a slower pace than in the prior month, while service industries expanded, separate reports this week are likely to indicate.

On Thursday, markets will eagerly scour the the minutes of the December Federal Open Market Committee meeting - where Federal Reserve officials agreed to the first US interest rate hike after nearly a decade - for clues on the timing of the next US rate move.

4. China and the yuan

China will double the yuan's onshore trading hours as it prepares for the currency's addition to the IMF's reserves basket in October. Trading will be extended to 11.30pm Beijing time starting from Monday (Jan 4), according to a statement posted on the central bank's website.

Last year, the yuan posted its biggest annual loss since 1994, after a shock Aug 11 devaluation, and most economists predict a further depreciation in 2016 as China looses its hold on the currency.

The yuan's weakening has worsened the strain for other Asian currencies and exports from the region. A further loss in exchange rate competitiveness against the yuan could increase pressure for other Asian countries to allow their own currencies to decline further.

5. A slew of PMIs to close 2015

The PMI index is among the most closely watched economic indicators in the world and this week sees a slew of such data showing how both the manufacturing and the services sectors of economies around the world fared in the last month of 2015.

Of most concern, the private PMI report on Chinese output due on Monday after the nation's first official economic report of 2016 signalled manufacturing weakened for a fifth month in December, the longest such streak since 2009.