The recent Singapore Exchange (SGX) fund flow data has revealed the fourth straight month of net outflows from institutional investors, with the month of May seeing another S$602 million of net outflows. Its value-focused composition may be a reason for the trailing performance with strength in growth sectors taking the bulk of investors’ attention lately. Australia kicks off the morning with consumer sentiment number delivering a slight beat (+0.2% versus 0% forecast), although the recent surprise rate hike by the Reserve Bank of Australia (RBA) may not have been fully factored in.ĭespite the rally in Wall Street over the past month, the Straits Times Index (STI) has not been gaining much traction, as sellers seem to be taking advantage of any rebound attempts as an opportunity to pare their exposure. Chinese equities continue to diverge in terms of performance, with the Nasdaq Golden Dragon China Index down 0.1% overnight despite the risk-on environment. That will leave the US$1,940 level as a key immediate support to hold, with any move below the level pointing to a breakdown of its 100-day moving average (MA) as well, and could pave the way towards the US$1,900 level next.Īsian stocks look set for a generally upbeat open, with Nikkei +0.92%, ASX -0.29% and KOSPI +0.38% at the time of writing. Consolidation at support may drain the supplies of sellers and raises the chances of a downward break. That kept gold prices in its consolidating moves just barely above a key upward trendline support. US Treasury yields were slightly lower, with the two-year still hovering near its May 2023 high.
Overall, the broader trend of moderating inflation over the past months may still allow the Fed to retain its guidance for a rate pause at the upcoming meeting for some wait-and-see, but leave the option of another hike in July on the table with a highlight of its data-dependent stance.
That said, market focus could be concentrated on the month-on-month core figure as well, which is expected to turn in a 0.4% increase (unchanged from April) as a reflection of some persistence in pricing pressures. It will be the final piece of data to drive some last-minute adjustment in rate expectations ahead of the upcoming FOMC meeting.įurther progress on the inflation front is expected to be the story from the year-on-year readings, with headline and core inflation projected to ease to 4.1% and 5.3% respectively from a year ago. A fall in US consumers’ short-term inflation outlook to its lowest reading since May 2021 may provide some conviction overnight, although the upcoming US Consumer Price Index (CPI) data will still have the greater say. Wall Street delivered yet another positive start to the new trading week (DJIA +0.56% S&P 500 +0.93% Nasdaq +1.53%), with strength in rate-sensitive tech reflecting some confidence that the Federal Reserve’s (Fed) tightening cycle will be heading towards its final phase.
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