Ella 
The Monetary Authority of Singapore (MAS) has opted to keep its policy settings unchanged for the fourth consecutive meeting, in line with market expectations. The decision comes amidst a backdrop of higher US Treasury yields and a stronger US dollar, which continue to exert pressure on risk sentiment across the region. However, a notable rebound in shares of tech giants Apple and Nvidia has injected a sense of optimism into Wall Street.
During the Asian session, markets witnessed a mixed open, with the Nikkei up by 0.22%, the ASX down by 0.32%, and the KOSPI down by 0.23% at the time of reporting. Despite ongoing concerns regarding rising Treasury yields and a resilient US dollar, the Nasdaq experienced a robust surge of 1.68%, propelled by gains in the “Magnificent Seven” tech stocks. This resurgence in tech stocks may help alleviate concerns surrounding potential interest rate hikes.
While the US Producer Price Index (PPI) continues to exceed expectations, leading to speculation about delayed rate cuts, markets have adjusted their forecasts, now anticipating a rate cut in September rather than June. This shift in expectations reflects a broader trend of recalibration, with markets initially pricing in multiple rate cuts at the beginning of the year.
Attention now turns to the upcoming earnings season, with strong US economic data likely to fuel discussions of a soft landing and provide momentum for earnings recovery.
In economic news, Singapore’s MAS has maintained its inflation projections and monetary policy stance, citing a gradual decline in core inflation expected by the fourth quarter. However, lower-than-expected first-quarter GDP figures raise the possibility of policy easing in the second half of the year, potentially aligning with actions by the Federal Reserve.
In the currency markets, the USD/SGD pair has been trading within an ascending wedge pattern since the beginning of the year, signaling a bullish bias. The pair’s upward momentum is supported by higher highs and higher lows, with the daily RSI indicating buyer control. Looking ahead, the pair may target a retest of the 1.360 level, while potential support is identified around the 1.345 level, particularly following the post-US Consumer Price Index (CPI) surge.
