[Week #39] 19th September – 23rd September Singapore Market Technical Outlook

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SG SESSION (Rebounding from 2,800 Critical Support Level)

The Straits Times Index (STI) ended the week with a loss of -1.6% (-44.88 points), erasing all the gains from the previous week.

At the current junction, STI is recovering from a Bullish Reversal Candlestick Pattern from thursday session towards the immediate resistance at 2,850 level.

As the 2,800 major support level continues to act as a critical pivot level for STI (highlighted last week http://singaporestockstrading.com/2016/09/12/week-38-12th-september-16th-september-singapore-us-market-technical-outlook/), the violation of this level is likely to infuse strong selling pressure towards 2,720 level.

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5 things to watch on the economic calendar this week (an extract and summary of investing.com)

 

1. Fed rate decision (Wednesday)

The central bank will also release its latest forecasts for economic growth and interest rates.

Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed’s statement, as investors look for any change in tone about the economy or future rate hikes.

Speculation about the timing of the Fed’s next interest rate hike has shaken major stock indexes this month following contrasting comments from top Fed officials.

Markets are currently pricing in just a 12% chance of a rate hike next week, according to Investing.com’s Fed Rate Monitor Tool. For December, odds stood at around 55%.

In the unlikely case of a rate hike, the U.S. dollar will shoot higher. In the more likely scenario in which rates remain unchanged, the focus will be on the Fed’s statement as well as the updated interest rate forecasts. A more hawkish message, which would leave the door open for a rate hike in December, will be dollar-positive, while a dovish statement will result in a dollar sell-off.

 

2. BOJ policy announcement (Wednesday)

The Bank of Japan’s latest rate decision is due during Asian hours on Wednesday. The BOJ will also publish a monetary policy statement, where it will present a comprehensive assessment of its policies.

Central bank Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision.

Speculation points to a possible interest rate cut deeper into negative territory, tweaks to its asset-purchase program or new rules on the duration of securities it will purchase in the bond market.

The BOJ has already implemented negative interest rates and is printing 80 trillion yen ($750 billion) a year to stimulate inflation after decades of deflation and stagnant growth, yet inflationary expectations appear to be weakening.

Disappointment over the BOJ’s announcement could see the yen strengthen against thedollar and euro.

 

3. August U.S. housing data (Tuesday)

The data could show that permits rose 2.5% to 1.170 million last month, while housing starts are forecast to decline 1.7% to 1.190 million.

On Thursday, the National Association of Realtors is to release data on existing home salesfor August at 10:00AM ET (14:00GMT) amid forecasts for a gain of 1.1% to 5.45 million.

 

4. Flash euro zone PMIs for September (Friday)

The euro zone is to publish preliminary data on manufacturing and service sector activity for September at 08:00GMT (4:00AM ET) on Friday, amid expectations for a modest decline.

Ahead of the euro zone PMI’s, France and Germany will release their own PMI reports at 07:00GMT and 07:30GMT respectively.

 

5. Reserve Bank of New Zealand rate review (Wednesday)

Most market analysts expect the central bank to keep rates steady after cutting them by 25 basis points to a record low 2.0% last month.

 

 

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