Calmer week ahead expected for global equities
A CALMER week awaits global stock markets, including Singapore's bourse - a contrast to the ups and downs of the previous week caused by the ongoing trade spat between the United States and China, a slump in oil prices and a technology stock rout led by worries on the impact of a slowdown in iPhone sales on tech suppliers.
As US markets enter a short Thanksgiving holiday week ahead, Wall Street capped a volatile trading session last week by closing mostly higher on Friday following optimistic remarks by US President Donald Trump that gave investors some hope that the trade feud with China may ease in the near term.
The data docket is relatively light. Thailand will release its third-quarter growth numbers, which according to a Bloomberg poll is expect to slow further to 4.2 per cent year-on-year (y-o-y). Malaysia's latest reserves data and October Consumer Price Index (CPI) is expected to be out on Nov 22 and Nov 23 respectively.
The US will release figures on housing starts, durable goods orders and existing home sales which will be closely monitored as further signals on the health of the world's largest economy.
No monetary policy decisions are expected from central banks in Asia-Pacific in the week ahead, according to UOB's weekly outlook note. Several markets will have a shortened trading week due to holidays in the coming week including Indonesia, Malaysia, India and Myanmar.
In Australia, the Reserve Bank will release its November meeting minutes on Nov 20, and governor Philip Lowe is scheduled to give a speech in Melbourne on the same day.
The brighter news surrounding China-US trade talks helped provide a fillip for Asian markets heading into the end of last week, and will certainly be something to look out for as the G-20 leaders' summit to be held in Buenos Aires from Nov 30 to Dec 1 looms closer.
Given the "multitude of permutations" regarding the outcome of meetings between US President Donald Trump and Chinese leader Xi Jinping at the summit, expect markets to be "jittery and sensitive" on any updates, noted IG's market strategist Pan Jingyi.
Perhaps less impactful for Asian markets, but certainly one to keep an eye out for, are the brewing domestic tensions in the UK over a draft Brexit agreement. Sterling plunged last week after three UK cabinet ministers resigned.
"Market participants seem to believe that the draft agreement in its current terms is not likely to be approved by the (UK) Parliament. However, expect Theresa May to fight until her last breath," wrote FXTM's chief market strategist Hussein Sayed in a note.
Options now include a no-confidence vote, a new election, new referendum, and no-Brexit deal, but when the critical moment comes no one knows what could happen, Mr Sayed said, adding: "All that we know is volatility in UK assets will hit the roof in the days and weeks to come."
In Singapore across the week, the Ministry of Trade and Industry will release its final print for Q3 2018 GDP on Thursday.
In its outlook note, UOB noted that the surprise 0.2 per cent y-o-y decline in Sept IP (industrial production) meant that Q3 manufacturing growth is now lowered to 4 per cent y-o-y, compared with the 4.5 per cent y-o-y reported earlier in the advance Q3 GDP estimates last month.
"In turn, we expect Q3 GDP to be revised lower to 2.4 per cent y-o-y (from the preliminary estimate of 2.6 per cent y-o-y)," UOB said.
Meanwhile, October CPI data will be released on Friday. Headline CPI inflation will likely edge higher to 0.8 per cent y-o-y (from 0.7 per cent y-o-y in September) while the MAS core inflation (which excludes private road transport and accommodation) should stay unchanged at 1.8 per cent y-o-y, according to UOB's estimates.
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