Singapore climbed close to 17-year peaks on Monday and was among stock markets to gain in emerging Asia, helped by the biggest banks in Southeast Asia hitting their all-time highs.

Currencies in the region slipped against the dollar as the greenback remained above the one-year low it hit last week after the US Federal Reserve's super-sized rate cut. Malaysia's ringgit and South Korea's won were the top losers.

Singapore's Straits Times index advanced 0.7% to its highest level since early November 2007, with top banks DBS Group, OCBC, and UOB all trading at their record-high levels.

Singapore's key consumer price gauge rose 2.7% in August from a year earlier on Monday, exceeding economists' expectations. The data comes before the next review of monetary policy settings in October by the Monetary Authority of Singapore.

The Singapore dollar, which hit a near 10-year high last week, shed as much as 0.2% to 1.292 per US dollar.

In the Philippines, stocks jumped around 2% to top their March 2022 level, helped by a broad-based rally across sectors. The peso slipped 0.2%, coming off a near six-month high scaled in the previous session.

On Friday, the Philippine central bank said it will reduce the amount of reserves that commercial banks are required to hold by 250 basis points from Oct 25, while mentioning that further cuts were on the table based on the inflation outlook.

Thai stocks and the baht advanced marginally as government-backed mutual fund Vayupak set the stage for more foreign inflows into the country's stock market.

"The offering of government-backed Vayupak Fund's type A units ... has driven foreign inflows into Thailand equities over the past month," analysts at Goldman Sachs said in a note.

"We think THB (Thailand's baht) is also likely to outperform in the near term, driven by equity inflows (prompted by a government-backed equity fund which launches on October 1) and elevated gold prices," they said.

The country's central bank said on Friday there was "no need" to reduce interest rates immediately after the Federal Reserve cut rates.

Malaysia's ringgit trended lower on Monday but was set for a blockbuster quarter, appreciating around 12% so far in the September quarter, making it the currency's best three months since January 1973, if the trend continues.

"Malaysia remains in pole position to attract investors and that is generating significant support for the MYR," analysts at Maybank wrote.

Elsewhere, the Indonesian rupiah and the South Korean won fell around 0.3%, while the Philippine peso weakened around 0.2%.

Stocks in Indonesia fell around 0.5%, while those in Malaysia were down 0.4%.

Source: Theedgemarkets

The NZD/USD pair trades on a stronger note near 0.6245 during the early Asian session on Monday. The pair edges higher as investors digest monetary policy decisions from the US Federal Reserve’s (Fed) sharp rate cut last week.

The Fed decided to cut its benchmark interest rate by 50 basis points (bps), marking the first reduction in four years. The half-point move signals that the Fed is acting aggressively to keep the US economy from stalling. Economists believe the rate cut last week will mark the first in a series of reductions this year and into 2025. The markets expect the Fed to cut its benchmark rate again at its November and December meetings, according to FactSet. This, in turn, might continue to undermine the US Dollar (USD) and act as a tailwind for NZD/USD. 

Investors will take more cues from the preliminary US Purchasing Managers Index (PMI) data for September, which is due on Monday. The Manufacturing PMI is expected at 48.6 in September versus 47.9 in August, while the Services PMI is estimated at 55.3 in September from 55.7 in the previous reading. Also, the speeches by the Fed’s Austan Goolsbee and Raphael Bostic will be closely watched. 

On the other hand, the latest Gross Domestic Product (GDP) figures show the New Zealand economy has contracted again, falling 0.2% in the second quarter (Q2). “Ongoing headwinds, including our expectation for further weakening in the labor market, suggest we are unlikely to see a rapid turnaround in the economy,” said Kim Mundy, economist at ASB Bank in Auckland. The fragile New Zealand economic outlook is likely to cap the upside for the Kiwi in the near term. 

Source: FXSTREET

Gold touched a record high ahead of US data that may offer clues on whether the Federal Reserve’s (Fed) 50-basis-point rate reduction last week will be the first in a series of aggressive cuts.

Bullion rose as much as 0.4% to hit US$2,631.13 (RM11,057.32) an ounce on Monday, beating the previous all-time high posted last Friday. Traders are weighing the outlook for rates ahead of a batch of crucial economic data — including the US personal consumption expenditures gauge and jobless claims — due later in the week.

Fed governor Christopher Waller said last Friday he would likely back quarter-point cuts at each of the next two central bank policy meetings in November and December, should the economy evolve as he expects. Still, he said another half-percentage-point cut could eventuate if the job market weakens.

Still, there are signs that the rally is overextended. Gold’s 14-day relative-strength index was hovering around 70, a threshold that some investors consider as overbought. Hedge funds and speculators have been adding bullish wagers on Comex — with net-long bullion positions hitting the highest in four years, according to the latest Commodity Futures Trading Commission data.

“The bullish momentum is undeniable, but in the near term, I might be cautious,” said Christopher Wong, a foreign exchange strategist at Oversea-Chinese Banking Corp (OCBC), adding that bullion may see technical support at around US$2,580 an ounce. 

Gold is also seeing support from increased haven demand, as traders monitored escalating tensions in the Middle East, leading to concerns that the fighting between Hezbollah and Israel could broaden into a wider regional conflict.

Spot gold was up 0.3% to US$2,629.14 an ounce as of 1.09pm in Singapore, following a 1.7% gain last week. The Bloomberg Dollar Spot Index was stable. Silver, palladium and platinum all declined.

Source: Theedgemarkets

USD/CAD remains in the positive territory, trading around 1.3560 during the Asian session on Monday. However, the US Dollar (USD) may struggle due to rising odds for further rate cuts by the US Federal Reserve (Fed) in 2024. According to the CME FedWatch Tool, markets are pricing in a 50% chance of a 50 basis point rate cut to a range of 4.0-4.25% by the end of this year.

The US Dollar (USD) continues to rise as Treasury yields recover their losses. The US Dollar Index (DXY), which measures the value of the US Dollar, holds ground around 100.80 with 2-year and 10-year yields on US Treasury bonds standing at 3.59% and 3.74%, respectively.

Philadelphia Fed President Patrick Harker stated on Friday that the US central bank has effectively steered through a challenging economic landscape in recent years. Harker compared monetary policy to driving a bus, where it's essential to balance speed.

Canada’s Retail Sales rose by 0.9% month-over-month to $66.4 billion in July, rebounding from a 0.2% decline in June and surpassing the expected 0.6% increase. Sales grew in seven of nine subsectors, with motor vehicle and parts dealers leading the gains. This marked the strongest expansion in Canadian retail turnover since April 2023, countering calls for aggressive rate cuts by the Bank of Canada (BoC).

The downside of the Canadian Dollar (CAD) would be restrained due to higher crude Oil prices. Crude Oil prices are rising due to concerns over potential supply disruptions amid escalating tensions in the Middle East.

Hezbollah and Israel engaged in heavy exchanges of fire on Sunday, with the Lebanese militant group launching missiles deep into northern Israeli territory following intense bombardment—some of the most severe in nearly a year of conflict, according to CNN.

Source: FXSTREET

Malaysia’s headline inflation eased in August 2024, driven by increased prices at restaurants, and costlier utilities and food, according to the Department of Statistics Malaysia (DOSM) on Monday.

The consumer price index (CPI) — Malaysia’s main gauge of inflation — rose 1.9% in August when compared to the same month in 2023, the official data showed. That compares to the 2.0% increase predicted in a Bloombergy survey of economists and July's 2.0% year-on-year rise. 

The food and beverages group, which contributes nearly 30% of the total CPI weight, increased by 1.6% in August 2024, the same rate as recorded in July.

Inflation for transport increased by 1.3% in August 2024 as compared to 1.2% in July following diesel subsidy re-targeting.

Core inflation, which measures domestic-driven inflation by excluding volatile items and other price-administered items, came in at 1.9% in August, the same pace as in July.

The official forecast calls for a headline inflation rate of 2% to 3.5% in 2024, versus 2.5% in 2023, with core inflation at 2% to 3% against the 3% average in 2023.

Source: Theedgemarkets

 Singapore's key consumer price gauge rose 2.7% in August from a year earlier, higher than economists' forecasts, official data showed on Monday, the final inflation reading before the next review of monetary policy settings.

The core inflation rate, which excludes private road transport and accommodation costs, was above both a 2.6% forecast in a Reuters poll of economists and a rate of 2.5% in July.

The headline inflation measure in August was up 2.2% from the same month last year, close to a 2.15% forecast in the poll.

Inflation in the Asian financial hub has cooled from a peak of 5.5% in early 2023, and dropped below 3% in June. July's 2.5% was the smallest annual increase in the core price index since February 2022.

The Monetary Authority of Singapore (MAS) has not changed policy since a tightening in October 2022. Its next policy review is in October.

The trade ministry adjusted its gross domestic product growth forecast range for 2024 last month to 2.0% to 3.0%, from 1.0% to 3.0% previously, after the economy posted stronger-than-expected second quarter growth.

Earlier this month, economists polled by the central bank upgraded their expectations for Singapore's growth to 2.6% this year, up from a forecast of 2.4% in surveys done in March and June.

Source: Theedgemarkets