Daily Observations:

Stocks in Asia and Europe fell earlier today as investors weighed prospects of major oil producers agreeing output curbs at talks this week. Crude rebounded following its steepest drop in two months, while sovereign bonds gained.


  • Dissenting dove-turned-hawk Fed official Eric Rosengren said the central bank’s failure to hike last week could stoke imbalances.
  • His colleague, Dallas Fed President Robert Kaplan, countered in a separate speech and said the monetary authority can afford to be patient in removing accommodation. His views were echoed by Minneapolis Fed President Neel Kashkari, who commented he was more worried about raising rates too quickly rather than too slowly.
  • The September preliminary figure for the Markit US Manufacturing PMI fell to 51.4 from 52.0; economists had expected a reading of 52.0.
  • The S&P 500 Index fell 0.6%, halting a three-day rally. Energy and tech companies led decliners.
  • The US dollar gained following two consecutive days of weakness, with the Bloomberg Dollar Spot Index rising 0.3%.
  • Treasuries were little changed on Friday as the benchmark 10yr yield remained flat at 1.62%; 2yr yields fell 1.6bps.
  • UBS said the odds of a Trump victory has not been fully priced in yet and a lack of clarity thus far on his polices could lead to further uncertainty in the markets.


  • Retail sales in July unexpectedly slid 0.1% from a month earlier, missing the median estimate of a 0.1% rise.
  • Headline inflation rose 1.1% from a year earlier, a 10-month low and less than the 1.4% expected, while core inflation grew 1.8% over the same period, missing the economists’ projections of 2.0%.


  • Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank, which has lost almost half of its market value this year, as she heads into the national election in a year’s time, Focus magazine reported.
  • The German leader also declined to step into the bank’s legal embroilment with the US Justice Department, which may seek as much as $15 billion in sanctions against the bank’s mortgage-backed securities business.


  • Foreign Secretary Boris Johnson told Sky News last week that the UK plans to trigger the Article 50 process in early 2017 and suggested the country’s exit from the EU could take less than 2 years. The timeframe is the clearest signal yet given in public by a member of the government, which previously had limited itself to saying Article 50 of the Lisbon Treaty wouldn’t be invoked this year.


  • Headline inflation for August fell 0.3% from a year earlier, less than the 0.4% drop expected and July’s drop of 0.3%.
  • Core inflation, which strips out food and oil prices, rose 1.0% over the same period, matching July’s rise but lower the 1.1% projected by economists.
  • Industrial production last month rose 0.1% year-on-year, improving upon July’s drop of 3.5% but missing estimates of 0.5%.

Precious Metals:

  • Spot gold retreated 0.2% this morning to $1,335.00/Oz, following its 2.1% gain last week. The next key resistance to test lies at the one-month high of $1,352/Oz.
  • Spot silver fell 0.50% earlier today to $19.5900/Oz, after data last Friday showed China’s August imports of silver was 29% lower from a year ago while total year-to-date imports was 7% below the same period last year.


  • Crude oil for October delivery slumped 4.0% Friday to settle at $44.48/bbl after Saudi Arabia signalled that the Algiers meeting later this week is unlikely to yield any concrete decision.
  • Oil pared some losses this morning to rebound 1.1% after Algerian Energy Minister Boutarfa claimed the Saudis have offered to cut production to January levels.



  • Spot 1.3608
  • USDSGD rose 0.2% to 1.3619, extending upon Friday’s 0.3% gain
  • UOB thinks it will be premature for MAS to ease policy further at its October review, according to a clients’ note dated Sep 23rd.



  • Spot 0.7634
  • AUDUSD remained relatively unchanged with the currency pair holding above the 0.7600 level, after ending 0.5% lower on Friday – the first losing day over the past 7 sessions.



  • Spot 1.3173
  • USDCAD was little changed earlier today, following Friday’s 1.1% rebound which was driven by worse-than-expected inflation numbers.



  • Spot 6.6807
  • The PBOC weakened its reference rate by 0.11% to 6.6744 against the dollar.
  • USDCNH remained largely unchanged around the 6.6800 handle after paring gains of 0.1% made this morning.
  • In a noted to clients, OCBC commented markets have reached consensus that both onshore and offshore yuan are likely to be managed tightly ahead of SDR inclusion on Oct 1st. furthermore investors are likely to say on the sidelines this week before China’s National holidays on Oct 1-7.



  • Spot 100.63
  • USDJPY continues to hold above the 100.00 support, despite trading lower from Friday’s close. The currency pair fell 0.4% to 100.59 earlier today.
  • A break below the all-important 100.00 level would confirm further downward momentum for the currency pair, with 95.00 a realistically possible target.



  • Spot 1.2941
  • Following its lowest close in more than a month last Friday, GBPUSD extended losses by as much as 0.3% more, to 1.2928, as currency traders raised bets on more weakness in sterling over due to concerns over Brexit negotiations.


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UEN: 201419754M

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