Dan | Income, Investing & Planning

The Federal Reserve and ECB urged by economist to embrace interest rate pause and argued for more patience - even if it means a short-term bout of inflation. This view came as many felt that the lagged effect of tightening are yet to make their way through the economic data. China’s golden week may spur volatility for Yuan at “red line” as trading will be halt in mainland China but continues in most other places world wide - potentially creating a disconnect. That said, the Chinese government’s aggressive defence stance may keep bears on the sidelines. German inflation sinks to level last seen before war in Ukraine as consumer prices advanced only by 4.3% from a year ago in September. At the moment, commodities are among the upside risk to the ECB prediction that EU inflation will return to 2% in second half of 2025. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

US Yield surge helps fed on inflation but risk a harder landing as the increase in borrowing cost puts both the housing market at risk and an additional hurdle for companies seeking financing. Consumer confidence slipped for the second straight month. US Business equipment orders rebound after downward revision. The increase was led by computers, electrical equipment and machinery. Despite all the worries, a camp of optimistic economist can be found as they raise the GDP growth rate estimates to 3% this year. Oil pushes higher as tightening market drives brent back to $95. Inventories have been failing in most regions and market experts are not afraid of a situation where the US have de-stocked too much in inventory which may push future demand up. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Tesla’s China exports are in the crosshairs of EU anti-subsidy probe in efforts to reshape the competitive dynamics within the world’s second largest EV market. The move is largely perceived to be a naked act of protectionism as the EU attempts to slow down Chinese EV growth in their region. Bond traders roiled by Fed sees US government shut down as next big wild card which had resulted in elevated levels of volatility in the bond market. While media concerns appear to be high, the topic of a government shut down is similar to that of the US government default, recurring and overplayed. Teetering China property giants undercut Xi’s revival push as investors are confused as to whether the government has a unified plan to stabilize the market. Property sales this year has remained lacklustre despite the slew of government stimulus as investors remain conservative. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

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BP LNG Project won’t start in time to boost Europe winter supply amid growing jitters in the LNG market which had sent price swings of as much as 40% last month. At the moment, Industry experts are calling for additional LNG supply in view of tightening supply conditions next year. Morgan Stanley’s sees risk rising for US consumer stocks at the back of better-than-expected performance this year and expected headwinds next year. Apart from Morgan Stanley, many analysts are also sharing the same view with consumers expected to curb their spending. China developers drop most in 9 months on Evergrande woes. Investors are bracing for further pain from the ailing sector as demand continue to remain depressed. At the moment, the surviving developers are running on their sales recovery and policy support. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Core inflation gauges are falling in US and Euro Zone with core US inflation seen falling below 4% while the Eurozone inflation seen falling to 4.5%. Such coinciding evidence would reassure central banks officer on both side to tone back on their rate hike in view of favourable inflation trend. Bond market faces quandary after the federal reserves signals that it is almost done with their rate hike as the two-year yields has been trading above 5% which is last seen in 2006. That said, while rates are expected to come down, US fiscal deficit and Fed’s QT might complicate the long-term view. Singapore is Japan’s top property investor in 2023 with inflows totalling about $3blllion so far in 2023. This came as institutions seek to take advantage of a weaker yen and the low cost of financing environment in Japan. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

The interest rate for CPF Special and MediSave Accounts will increase to 4.04% per annum in the fourth quarter of this year. https://cna.asia/3LvAXmb

US Small business owner says that the damage from high rates will persist with half of the business owners saying that their margins and growth has already been impacted in the last 18 months. To make matters worse, the pain is getting worse as more owners are sounding off that they are earning lesser than pre-pandemic. China ex-PBOC head calls for more policy boost to hit the 5% growth target given the weak market confidence in order to promote a virtuous economic cycle. Looking at the actions taken, more policy support can be expected moving into 2024. European gas prices may be 20% lower than forecast next summer with demand set to slide at the back of a stockpile level above seasonal norm. Still, industry players are expecting a tighter market in 2025 as the supply situation changes accordingly. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

US and allies sees Russia war in Ukraine grinding on and are now looking for medium- or long-term planning needs to reflect the “new” reality. This means that the west will now be supplying more resources - in funds and weapons - as part of their “long-term” assistance to Ukraine. Global economy poised to slow as rate hike bite with growth expected to ease to 2.7% in 2024 after an already sub-par expansion of 3% this year. On a national level, most country had suffered a growth downgrade apart from the United States. The rise in oil prices is a problem for the Federal Reserve’s soft landing as the same scenario had played a role in tipping the US into a recession back in 1970s, 80s and 90s. While economic data maintains strong, policy makers are still on high alert as to the role oil prices may play in the near future. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

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Fed’s higher for longer mantra has doubters in the bond market as traders are positioning for lower rates by the middle of next year versus the current market level. With rates at its current level, yields are expected to come back down as demand picks up given that the returns are a good alternative to equities. Chinese police detains some staff of Evergrande wealth unit signalling a shift in the current property crisis which has now involved the criminal justice system. The police has also involved investors to provide leads to the authorities in the midst of the ongoing restructuring. France is set to allow selling fuel at loss in order to curb inflation. This came as fuel prices has became an explosive political issue given its role in inflation. That said, the government plan has provoked a pushback from the industry given that it is not feasible for small vendors to accommodate to the governments demand. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

China cuts bank reserves requirements to aid fiscal stimulus for the second time this year by another 25-basis point to a weighted average of 7.4% after the reduction. This cut will help maintain ample liquidity in the banking system with more support growth expected on the fiscal front in Q4. ECB hikes interest rates for the 10th consecutive time to quash inflation. The deposit rate has been raised by another 25 basis point which now stands at a record 4%. This rate hike is expected to deal further damage to an economic expansion that was already languishing within the EU region. Oil rally gathers pace as US benchmark WTI hits $90 a barrel as cries of a possible supply short fall threatens further price volatility in the market. At the moment, demand maintains robust why supply is being constricted by the major producers. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

US Core CPI picks up, keeping another fed hike in play this year as the core CPI advanced slightly above the median estimates in July. The advance is partly due to higher rental cost, motor vehicle insurance and air travel. US five-year adjustable rate mortgage reaches its highest level since 2011 to 6.59% while the 30-year fixed rate stood at 7.27% for the week ended 8th of Sept. Housing affordability stands at a low record as limited inventory and higher borrowing cost makes monthly payment more difficult. Oil price advances as the International Energy Agency adds to the view of a tight market moving in the second half of this year with major supply deficit expected. The bullish view added more impetus to a rally that has been underway since mid-June as major oil producers curbed supply. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Kim Jong Un crosses into Russia for a rare summit with Putin probably to discuss matters pertaining to the procurement of weapons for Russia’s ongoing war of attrition with Ukraine. On the other hand, North Korea may be seeking for food aid and weapon technology in return. China housing rebounds fades fast in big city after stimulus as sales of existing home plunged by 35% last weekends with most developers experiencing similar trends. Interestingly, home sellers are slightly raising their asking price after the easing despite the situation. Central banks are set for higher for longer rate environment to fight inflation as most western central bankers are leaning for another rate hike in their upcoming meetings. That said, the US fed is confident that they may have engineered a soft landing while those in EU are heading towards a recession. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Biden doubts that China will be able to invade Taiwan amid economic woes as he felt that President Xi’s hands are tied and would not have the same capacity as he had before. He had also reiterated US stance on restricting export of high-tech chips to China in the name of national security. China shows signs of stability as credit and inflation situation improves. The strong credit data showed that the recent steps may have started to show effect which are encouraging signs. The question now is if confidence level will pick up or remain depressed. US dollar starts to wane under pressure as China and Japan defences take effect with the dollar gauge pulling back after a record hot streak through July and August. Investors are now paying attention to this week US Key inflation data for clues of the fed’s next action. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

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Wallstreet fears a too hot economy as recession bet plunges with probabilities tumbling across all asset classes when compared to last year. This means that market risks are increasing at the mercy of good headlines which could result in higher rates for longer that may eventually break the economy. ETF Traders are pouring cash into EM’s non-China growth engines, especially those with exposure to India and Latin American stocks. Flows into actively managed ETF are already rivalling its passive peers as the passively managed indexes exposures to EM are very limited. Bond traders are bracing for another rate hike at the back of inflation risks with the two-year treasury yields hovering close to the highest level since 2007. At the moment, the fed messaging is that the monetary policy is at a good place now but more data is necessary to determine their next steps. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Euro-zone barely grows in the second quarter after export downturn adds pressure resulting in downward revision in overall growth numbers for the region. The recent data will provide more evidence of the economic weakness before the central bankers make their rate decision this month. US initial jobless claims slide to lowest level since February which had proved to be a vital support to the economy despite gradually softening. The data will provide more ammunition for hawkish camp to push for another rate hike before the year ends. Emerging currencies close to erasing 2023 gains as gloom depends with anxiety raising over the federal reserve’s stance on keeping interest rates higher for longer. China’s economic troubles had also weighed on emerging assets as investor pessimism worsens and investors flee to the US market. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok

Fed set to double its economic growth forecast after a string of stronger than expected reports on everything from consumer spending to residential investment. Despite the rising optimism, the central bank had signalled that it will probably leave the benchmark rate unchanged. Japan ramps up verbal defense as yen sets fresh 10 month low raising the odds of a government intervention should the slump continues. The current currency weakness that Japan is experiencing can be attributed to the loose monetary policy stance in a globally monetary tight environment. Oil edges away from $90 after OPEC+ leaders extend supply cuts through the end of the year to drain existing inventories further. The move came as a surprise to most as this will bring the commercial stock to low levels that is only seen in very big years. 👀 Prefer watching instead of reading? You can catch the video format on Instagram, YouTube & TikTok