Singapore shares are likely to be weighed down at the start of the trading week by a tepid Wall Street last Friday.
Shares in the United States ended lower after the latest set of American job data fuelled speculation that the Federal Reserve will raise interest rates in December.
The US Labour Department said on Friday that the world's biggest economy added 156,000 jobs in September. This was slightly below forecasts but not weak enough to prevent a rate hike by December, analysts said. Fed vice-chairman Stanley Fischer noted that the jobs report was "close" to ideal, showing that employment growth was neither too fast nor too slow.
Another potential market-moving event is the release of the minutes of the September meeting of the US Federal Open Market Committee on Thursday morning .
Asia closed in the red on Friday, following wild swings in the British pound due to worries over a potentially difficult divorce between Britain and the European Union.
More volatility is ahead as sentiment is likely to remain fragile ahead of the Nov 8 US presidential election, an ongoing local corporate earnings recession and rising risk of a technical recession, according to DBS Group Research.
The second US presidential debate between Democrat nominee Hillary Clinton and Republican candidate Donald Trump this morning will be closely watched.
"Risk-asset markets fear Trump. The polling results show a consistent picture of a neck-and-neck race since late September. What is becoming clear is the equities market is uncomfortable with a Trump victory. But the US dollar - a safe haven asset - rises when the odds of a Trump win rise," according to DBS Investment Insights.
Meanwhile, this will be a big week for Singapore as its third-quarter gross domestic product figures and the policy statement by the Monetary Authority of Singapore (MAS) are due on Friday.
Analysts believe that the MAS is likely to maintain its current neutral monetary policy stance as the country's economic and inflation developments have not deteriorated sufficiently for the MAS to contemplate further easing for now.
"Growth is sluggish, but not weak enough to prompt a policy response," Capital Economics said.
Also on Friday, STI heavyweight Singapore Press Holdings will report its 2016 full-year results ended Aug 31.
Sentiment could improve if oil maintains its upward trajectory. Although profit-taking pared US crude to US$49.81 a barrel on Friday, oil gained 3.3 per cent over the previous week on hopes of production cuts by the Organisation of Petroleum Exporting Countries (Opec).
Also on traders' radar are informal talks, which will end on Thursday, between Opec energy ministers and Russian officials in Istanbul.
"The rebalancing of demand and supply could possibly be brought forward to the first half of next year (from end-2017).
"This should help put a floor under oil prices and set the stage for a steadier recovery. But a reactive spike in output from US shale players could cap the upside at around the US$60-a-barrel mark," DBS Group Research said.
Among the oil and gas stocks, DBS has buy calls on Sembcorp Industries and Ezion Holdings.
"Interest in Sembcorp Marine should pick up if oil heads to a year- to-date high of US$62 a barrel, as the stock is seen as a 'purer' play to oil prices," the brokerage said.
