Singapore Equities Trade at Near 1-week High
The STI surged 56 points or 1.8% to a near one-week high of 3,135 in late trade on Tuesday, amid easing concerns over a surge in inflation and tight monetary policy from the US Federal Reserve after retail sales stalled in April. On the pandemic front, Singapore announced Monday that the travel bubble with Hong Kong will be postponed again in light of the spike in COVID-19 cases in the city-state, while Hong Kong said that another update will be announced on or before June 13th. Meantime, the World Economic Forum canceled its annual meeting in Singapore this August. In business news, GDS Holdings, a developer and operator of a data center across China, is holding preliminary talks with the Singapore-based logistics real estate developer and fund manager over a potential transaction that could value the assets at $8 billion to $10 billion, said Bloomberg News. Comfortdelgro Co. jumped 3.8%, while OCBC gained 2%.
10-Year Treasury Yield Steady on Tuesday, FOMC Minutes Eyed
The yield on the benchmark 10-year Treasury was little changed at 1.65% on Tuesday, lower than a five-week high of 1.7% reached last week, amid expectations the Fed will not tight monetary policy soon. Comments from several Fed officials have helped to calm investors’ concerns over a rise in inflation and borrowing costs. Dallas Federal Reserve President Robert Kaplan said he does not expect interest rates to rise until next year and Federal Reserve Vice Chair Richard Clarida said the weaker-than-expected U.S. jobs report showed the economy had not yet reached the threshold to warrant scaling back the central bank’s massive bond purchases. FOMC minutes due on Wednesday will also be in the spotlight and traders will be looking for clues on the Fed’s next steps.
UK Stocks Rise Towards 14-Month Highs
The FTSE 100 rose above 7,100 on Tuesday, moving closer to a 14-month high of 7,130 hit on May 7th, amid signs of recovery in the UK labor market. The first-quarter jobs report showed a continued fall in unemployment, a further rise in vacancies to their pre-pandemic levels, and growth in the employment rate. Meanwhile, inflation fears eased for now, while investors continued to focus on the prospect of a strong economic rebound. On the corporate front, Vodafone missed Q1 earnings expectations, while real estate firm Land Securities saw full-year losses widen by over £500 million as the pandemic battered its London office portfolio.
Japan Annualized GDP Shrinks More than Expected
Japan’s economy shrank at an annualized rate of 5.1 percent in the first quarter of 2021, worse than market forecasts of a 4.6 percent contraction and following a downwardly revised 11.6 percent growth in the previous period, a preliminary estimate showed. Private consumption, which accounts for more than half of Japan’s GDP, declined 5.4 percent, after a 9 percent rise in Q4. Also, government consumption fell 6.9 percent, compared to a 7.3 percent advance.