On the tariff front, the worst of the tariff hikes are put on hold till July 8. According to S&P Global Market Intelligence, its surveys have picked up some bright spots. “Stronger output gains have notably been seen in the US service sector and eurozone manufacturing, the latter buoyed by expectations of greater fiscal spending (particularly in Germany). UK growth also lifted higher in May to assuage downturn fears, and the June data will be important to gauge any impacts from the US-UK trade deal, April’s tax rises and recent government spending review,” the report says.
The Straits Times Index fell by 28 points week-on-week in the week of June 16-20, to end at 3,883. Both short- and medium-term indicators appear weak. Quarterly momentum has turned down but remains above its equilibrium line. However, short-term RSI and MACD point to weakness. ADX is falling, the DIs are neutral and they could turn negative. ADX is at 17, and may continue to ease. A declining ADX with a reading at 17 points to a sideways trend. With these underminings, the STI may continue to consolidate. Support stays at 3,850 for the time being as volume has dwindled. However, if indicators remain weak, the STI may break down.
The 10-year Singapore Government Securities (SGS) yield remained near the low end of the year’s range at 2.29% as at June 20. With the weak US dollar, regional central banks will probably have room to cut rates and spur growth, market watchers say.
