RHB’s eonomists and strategists point to possible higher US inflation because of immigration curbs, the capex boom, fiscal dominance, and AI bottlenecks. These “could force the Fed to be more aggressive and drive up bond yields.”
The banks have an outsized impact on the Straits Times Index because, by weight, they account for 48% of the STI based on Bloomberg’s calculations. Other calculations put the banks’ weight in the STI at above 50%. The uptrend of the three local banks remains very much in force and, apart from temporary hiccups, it shows no signs of reversing.
Banks are sensitive to interest rates. According to economists and market strategists, central banks have turned hawkish since the Iran War erupted. Firmer rates, based on the orthodoxy, should be positive for banks.
