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Gloom Poured Into Markets; Will The Fed Taper This Month?
Forward, Tradeable | 16 December 2013
By: Justin Harper
Articles (23) Profile
By: Simeon Ang
Articles (125) Profile

The factories of Japan seem to have their engines roaring in the recent Tankan Survey release. Across all industries, large companies plan to boost spending by 4.6 percent in the year ending March 2014.

Despite that, global markets have been fairly sluggish as we head towards the festive season, with Singapore particularly listless. This week, the US dominates the economic calendar and traders will be hoping for no end-of-year surprises before Santa arrives.

HSBC/Markit has just released the reading of China’s manufacturing Purchasing Managers’ Index (PMI). The reading (50.5) suggested a slower pace (versus 50.8 in October) of expansion of the Chinese manufacturing over November.

Morning trade in Singapore looks to be turing horrid as investors take more heed from the flash reading of China’s PMI versus Japan’s Tankan Survey.

Read on to find out what’s in store for the trading week ahead!

What to Look Out for in the Next 7 Days…

In Singapore…

  • November Balance of Trade

Trade figures for November is likely to be grow from October’s figures as the holiday season draws near. However, the electronics sector might continue to languish as global demand for semiconductors and electronic peripherals remain muted.

In October 2013, Singapore’s trade surplus grew to $6.7 billion from $4.5 billion in September 2013. Higher sales of non-electronics outweighed the decline in electronic shipments.

Around the World…
In the US, look out for,

  • Industrial production for November
  • FOMC two-day meeting
  • Building permits and housing starts for November
  • Q3 GDP report

Economic data coming out of the US has been on the positive side as of late, which has been a double-edged sword. Upbeat US data leads to fears that Fed tapering is imminent.

We will get a better idea of this from the two-day Federal Open Market Committee (FOMC) meeting which starts on Tuesday. FOMC meeting minutes from October have been released which quoted members as saying the U.S. economy was growing at a “moderate” pace.

There was an extensive discussion scaling back the Fed’s $85 billion-a-month bond-buying program. This expectation, although no definitive date has been given, has dominated global markets for many months. Don’t expect a decision anytime soon.

Traders also have industrial production figures due out on Monday. In October, factory output fell, although by a minor amount. Output slipped 0.1 percent which was the first decline for three months. Analysts expect production to gain 0.2 percent for November.

In Europe,

  • October trade balance figures

September’s trade balance provided a welcome boost for the Eurozone, as the surplus to 13.1 billion euros, compared to 8.6 billion euros for the same month last year. This happened as companies tightened their belts on importing while increasing exports. Analysts had expected a 10 billion euro surplus for September.

The trade surplus for the 17 countries is one of the few positive signs of recovery within the beleaguered Eurozone. But it hides the fact that Germany is the main economy driving the figures higher, as one of the region’s few healthy economies.

Scroll down to our Calendar below to find out more about the exact dates of these figures release as well as other important economic data.

Country Type Details
16 December 2013
SG-Corp Dividend SG$0.05 Goodpack Ltd.
EUZ Economy Dec Markit PMI – Composite – Flash
EUZ Economy Oct Trade Balance sa (Eur)
US Economy Nov Industrial Production
US Economy Nov Capacity Utilization
CN Economy Dec HSBC/Markit Manufacturing PMI
17 December 2013
US Economy FOMC 2-Day Meeting Begins
HK Economy Nov Unemployment Rate SA
EUZ Economy Nov Consumer Price Index (Y/Y)
US Economy Nov Consumer Price Index
JP Economy Nov Trade Balance-CC NSA
CN Economy Nov Leading Indicators
SG Economy Nov Balance Of Trade
18 December 2013
MY Economy Nov Consumer Price Index Y/Y
US Economy MBA Mortgage Applications
US Economy Nov Housing Starts
US Economy Nov Building Permits
US Economy Nov Housing Completions
US Economy Dec Markit PMI – Manufacturing – Flash
US Economy FOMC Policy Statement (with Economic Projections; Press Conference approx 14:30)
US Economy Fed Funds Target (range mid)
US Economy FOMC Policy Announcement
19 December 2013
SG-Corp Dividend SG$0.068 Singapore Telecommunications Ltd.
US Economy Initial Claims
US Economy Continuing Jobless Claims
US Economy Bloomberg Consumer Comfort Index
US Economy Nov Leading Indicators
JP Economy BoJ Target O/N Call Rate (range max)
20 December 2013
US Economy 3Q13 GDP Third Report
EUZ Economy Dec Consumer Confidence – Flash
23 December 2013
SG-Corp Dividend SG$0.01 OSIM International Ltd.
SG Economy Nov Consumer Price Index Y/Y
HK Economy Nov Consumer Price Index (Composite) Y/Y

Source: FactSet Research Systems

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This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

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