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Expect Markets To Take Direction From US For The Week
Forward, Tradeable | 17 February 2014
By: Justin Harper
Articles (23) Profile
By: Nicholas Tan
Articles (71) Profile

After losing more than 6 percent since the start of the year, the Straits Times Index (STI) has been climbing all week although no-one, for a minute, thinks we are in any kind of a bull run.

It has been a slow and painful process and confidence in the local market is still shaky as the STI clawed back some 2 percent of losses in the past few weeks. It would seem that the bearish sentiment on the market has taken a backseat, at least for now.

The US economy will dominate events this week with the Federal Reserve (Fed) in action, which is likely to dictate trading sentiment.

What to Look Out for in the Next 7 Days…
 In Singapore…
  • GDP revised figure (year-on-year)

A surge in manufacturing output late last year may have helped Singapore’s economy expand more than thought in 4Q13. Economists predict that gross domestic product (GDP) likely grew 5.3 per cent from a year earlier, faster than the advance estimate of 4.4 percent released in January.

The data, which will be released on Thursday, should show an upward revision after Singapore reported a surprise 6.2 percent jump in December 2013’s manufacturing output.

Around the World…
In the U.S…:

  • Fed’s John Williams speaks
  • FOMC January minutes published
  • Housing starts
  • Markit flash PMI manufacturing

It is a busy week for the Fed starting with San Francisco President John Williams speaking on the economic outlook and its implications for monetary policy at the New York University. The Fed will release minutes from its 28 to 29 January meeting, the last presided over by former Chairman Ben Bernanke and at which policy makers further reduced the central bank’s record stimulus. These minutes are normally analysed comprehensively by traders looking for any clues about the US and global economy. It could prove a welcome distraction from the dull markets.

Manufacturing data out of the world’s biggest economy is also likely to be keenly watched and we have the Markit flash Purchasing Managers’ Index (PMI) giving an early insight into the state of factory output this month. January’s flash figure was disappointing, as it fell to 53.7 from December 2013’s 55. While still in positive territory it was a three-month low.

We also have US home sales and new home construction coming out this week, although early indications are that they probably fell.

In China…:

  • HSBC flash manufacturing PMI

China started the year in disappointing fashion with softer-than-expected factory output data for January. HSBC’s PMI survey showed contraction for the first time in six months as it fell to 49.6. A figure above 50 signifies expansion. This was down from December’s 50.5 and has raised more concerns about the state of the Chinese economy and its ability to stage a sustained recovery.

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.

 

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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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