Markets Insights

US Fed minutes, payroll data likely to steer Asian markets

Data out of the United States is likely to set the direction for financial markets in Asia, including Singapore, over the next few days.

The US Federal Reserve is due to release its June meeting minutes early on Thursday, which could offer more details about its plans to cut the size of its balance sheet.

"Investors will parse the minutes for the strength of the anxiety (over inflation), which could put a brake on further hikes in the near future," said a Thomson Reuters report.

Investors will also be keeping an eye out for the US June payroll report on Friday.

"Forex and equity markets are becoming more sensitive towards the (US) policymaker's timeline regarding when and how to exit the unprecedented post-crisis quantitative-easing plan," noted CMC Markets Singapore market analyst Margaret Yang.

"One thing is for sure - we are embracing a tightening cycle, it is only just a matter of time. Lack of progression in Donald Trump's fiscal stimulus and tax reform also weighs on market sentiment."

Last week saw Singapore stocks see-sawing in line with uncertainty in Wall Street, which climbed 0.29 per cent last Friday. The US markets will be closed tomorrow for a holiday.

EFFECT OF US POLICY

Lack of progression in Donald Trump's fiscal stimulus and tax reform also weighs on market sentiment.

CMC MARKETS SINGAPORE MARKET ANALYST MARGARET YANG

The benchmark Straits Times Index fell 32.17 points, or 0.99 per cent, to 3,226.48, but was still 17.01 points or 0.53 per cent up for the week, thanks to a sturdy 1.3 per cent gain last Thursday.

One of the key market highlights was the cash offer by American private equity company Blackstone to privatise Japan-based Croesus Retail Trust at $1.17 per unit, which analysts said exceeded their price targets. Units of the trust jumped by 11.8 per cent through the week to end at $1.18 last Friday.

TalkMed Group shares took a beating after chief executive Ang Peng Tiam was suspended for eight months after a failed appeal against a conviction of professional misconduct and a $25,000 fine. The counter slid 1.5 per cent or one cent to 67 cents, racking up a 10.1 per cent drop for the week.

Malaysia-based Shopper360, which debuted on the Catalist board last Friday, finished at 29.5 cents, 1.7 per cent higher than its offer price of 29 cents per share.

Property counters were given a fillip on news that the Government has raised the supply of land for private housing under the Government Land Sales programme in the second half of the year.

OCBC analyst Eli Lee noted that this is a positive move for the industry as developers are finding it challenging to replenish their dwindling land bank in a competitive land acquisition environment.

"Given improving fundamentals in the sector, we continue to forecast for an inflection point in physical home prices by 2018," he said, adding the brokerage has an "overweight" rating on developers, with CapitaLand, Wheelock Properties (Singapore) and Wing Tai Holdings among its top picks.

A version of this article appeared in the print edition of The Straits Times on July 03, 2017, with the headline 'US Fed minutes, payroll data likely to steer Asian markets'. Print Edition | Subscribe