Daily Observations:

All 3 US stock benchmarks rose together to record highs for the first time in 16 years amid surprising earnings, while European shares erased the slump that followed Brexit. In Asian trade, energy stocks advanced amid an oil rally, while the dollar strengthened. Safe haven assets including gold and government bonds fell.


  • The S&P 500, Dow Jones and Nasdaq indices all hit record highs last night, the first time that has happened since 1999; the S&P 500 closed 0.5% higher at 2,185.79.
  • Retailers rose as better-than-expected results from Macy’s Inc. and Kohl’s Corp led the sector higher. Energy shares jumped as well, on the back of a crude oil rally.
  • Import prices in July unexpectedly rose by 0.1% month-on-month, while price gains in June was revised upwards from 0.2% to 0.6%; economists were expecting a 0.4% decline last month.
  • The US dollar rebounded during New York trading and extended its gains further earlier today, with the Bloomberg Spot Dollar Index rising 0.2% during Asian trade today.
  • Benchmark 10yr note yields rose 5bp to 1.56%. An auction of 30yr Treasury bonds saw less investor demand than previous US debt sales this week.
  • San Francisco Fed President John Williams said a hike is justified this year as the US economy continues to move towards its “goals”. Feds funds futures pricing on Bloomberg now indicate Feb 2017 as the first month with a more than 50% chance of a rate hike; data was showing Jun 2017 the previous day.


  • Industrial production in July rose 6.0% from a year earlier, missing expectations of 6.2%.
  • Retail sales over the same period grew 10.2%, slower than the forecasted 10.5%.
  • Meanwhile, fixed asset investment rose by 8.1%, lower than the 8.9% median estimate.
  • Net capital outflows totalled $39 billion in July, the most in 6 months, the Institute of Finance reported.

Precious Metals:

  • The World Gold Council reported a rise in gold demand last quarter, up 15% year-on-year to 1,050 tons, underpinned by strong investment demand which soared 141% to 448 tons.
  • Gold for immediate delivery lost 0.9% to $1,334.97/Oz during Asian trade this morning.
  • Spot silver dropped 1.4% to $19.9398/Oz.


  • Saudi energy minister said next month’s OPEC talks could include steps to stabilize the oil market, Reuters reported. Differences between Saudi Arabia and Iran caused the demise of a proposal to freeze output at an April summit. Both countries have since boosted output.
  • Crude oil futures expiring in September rose 4.3% to $43.49/bbl.



  • Spot 1.3449
  • USDSGD added 0.2% to 1.3460 earlier after an increase in US Treasury yields overnight supported demand for the dollar.
  • The currency pair continues to be bound between the 1.3400 and 1.3500 handles.



  • Spot 0.7678
  • AUDUSD slid 0.6% to a low this morning of 0.7671, a previous resistance level that was broken a few days ago.
  • Further Aussie weakness might ensue in view of this morning’s poorer-than-expected July economic data from China, Australia’s largest trading partner.



  • Spot 1.2978
  • On the back of oil’s overnight rally, USDCAD slid 0.6% past the 1.3000 support.
  • A retreat back to the 1.2800 handle is likely, should oil prices remain buoyed.



  • Spot 6.6444
  • The PBOC sets its fixing rate 0.04% weaker to 6.6543 against the dollar.
  • Both onshore and offshore yuan weakened against the greenback following the release of China’s industrial production, retail sales and fixed asset investment numbers, which missed estimates and increased pressure for more government stimulus.
  • USDCNH was 0.1% weaker at 6.6527.



  • Spot 1.2974
  • GBPUSD was largely unchanged, hovering just below the 1.3000 handle.
  • The next support comes in at 1.2798.


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UEN: 201419754M

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