Singapore Traders Spectrum
Wired Weekly
Page 3
Table 1: US economic data releases this week
Date Time Event
Survey Prior
09/04/2012 ISM Manufacturing Aug 50 49.8
09/04/2012 Construction Spending MoM Jul 0.50% 0.40%
09/05/2012 Total Vehicle Sales Aug 14.10M 14.05M
09/05/2012 Domestic Vehicle Sales Aug 11.00M 11.00M
09/06/2012 Challenger Job Cuts YoY Aug -- -44.50%
09/06/2012 ADP Employment Change Aug 140K 163K
09/06/2012 Initial Jobless Claims 01-Sep -- 372K
09/06/2012 ISM Non-Manf. Composite Aug 52.5 52.6
09/07/2012 Change in Nonfarm Payrolls Aug 125K 163K
09/07/2012 Change in Private Payrolls Aug 128K 172K
09/07/2012 Unemployment Rate Aug 8.30% 8.30%
Source: Bloomberg
Several events flashpoints fill the month of September. First
is the ECB policy meeting on September 6. This is followed
by the German constitutional court ruling on the legality of
the ESM on September 12. The ECB may announce details
of its own bond-buying program on the 6th or wait till the
crucial September 12 ESM ruling before unveiling plans to
buy Euro government bonds. The outcome of the FOMC
meeting on September 13 immediately follows Germany’s
constitutional court ruling. Ironically, Ben Bernanke’s
comments at Jackson Hole has reduced the positive surprise
in the lead-up to the September 13 FOMC meeting. Across
the Atlantic, the outcome of the troika’s (IMF, ECB and EC)
assessment of Greece’s reform efforts is expected to be
ready by end September. This will be ahead of the EU
finance ministers meeting come October 8 that will decide
whether to give Greece the next aid tranche that amounts
to €31bil.
With these events lined in coming weeks and equity markets
already rebounded from their early June lows, the trend is
likely to be choppy in September. For the STI, we peg a
range from 2930 to 3100.
O&M and commodity stocks indirect beneficiaries of US
stimulus hope
The USD weakened against major currencies after FED
chairman Ben Bernanke made the case for further monetary
stimulus at the Jackson Hole summit. The USD-SGD cross
rate dropped 0.42% to 1.2476 on Friday while the Dollar
Index fell 0.59% to 81.2. Hopes of QE3 had led the Dollar
Index’s 3.5% decline since late July.
With stimulus hopes alive, the USD should stay pressured
and this should benefit USD denominated commodities.
Gold price, for example, started to climb from USD1600 an
ounce in mid-August to USD1684 an ounce. On Friday, it
gained 1.9% in reaction to Ben Bernanke’s comments.
Oil price also rose in reaction to Ben Bernanke’s Jackson
Hole speech. Brent futures gained 1.7% to USD114.57pbl.
Technically, it can still strengthen to slightly below
USD122pbl before correcting.
Chart 3: Gold price rising since August Chart 4: Brent crude
Source: DBS Research