Markets Overview

HIGHLIGHTS AHEADO

    Thursday (4 Sep), market attention will be on the monetarypolicy decisions of three major central banks starting with theBank of Japan (expected to be announced between 11am and 2 pmSingapore time) followed by the BOJ Governor Kuroda’s post-decisionpress conference (at 2:30pm Singapore time). During the Europeantrading session, we have the Bank of England (7pm Singapore time)and then the European Central Bank (7:45pm Singapore time) whichis accompanied by a post-decision press conference by ECB PresidentMario Draghi (at 8:30pm Singapore time).

    For the US, we will have the August ADP employment numbers (4Sep, on Thursday instead of the usual Wednesday release date due tothe Labor Day holiday) where markets are looking at slightly lower jobcreation of 212k (from 218k in Jul). There is also various other importantUS data on the tap including the usual weekly US initial jobless claims,Bloomberg consumer comfort survey, the July international trade ingoods & services data, August Challenger jobs cuts survey, 2Q laborproductivity & ULC data, the August ISM non-manufacturing survey,and the final August print for the Markit US services & composite PMI.

    In the rest of the developed economies, we have German July factoryorders, August retail PMI for UK, Euro-zone and its major constituenteconomies and France 2Q ILO employment data.

    US stocks ended mostly lower for the second straight session onWednesday (3 Sep) despite strong US factory orders as the losses intechnology shares led the declines with particular focus on the 4% declinein Apple’s stock price. The US dollar weakened against the euroand the yen on Wednesday ahead of today’s (4 Sep) BOJ and ECB decisionas investors chose to lock in the dollar gains following the dollarrally recorded the day before. The US Treasury market continued its losingstreak for the second straight although the UST prices pared backsome of the session’s earlier losses after earlier optimism of a cease-firebetween Ukraine and Russia faded. Global oil prices rebounded smartlyon Wednesday after suffering a major slip the day before, as the optimismthat the presidents of Russia and Ukraine are working towardsa ceasefire will help to limit the effects of the violence on the economicgrowth of Europe and help boost oil consumption.

    This morning, South Korea released their 2Q 2014 GDP numbers andshowing a 3.5% y/y growth, coming in slightly lower than the 3.6% y/ygrowth rate in 1Q. On a q/q SA basis, South Korea’s GDP also gained0.5% from 1Q, as exports (+1.7%), facility investment (+1.1%) and governmentspending (+0.3%) rose and counteracted the weakness inprivate consumption (-0.3%). Later today, we are expecting consumerconfidence numbers coming from Thailand. After hitting a low of 67.8in April this year, and with the military coup in May, Thailand’s consumershad become increasingly more confident about the economicprospects.