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Local Manufacturing Activity Extends Contraction, Possible Rate Hike In June
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By: Joey Ho
Articles (30) Profile

Singapore’s manufacturing activity contracted in April, marking the 10th consecutive month of contraction. The latest Purchasing Managers’ Index reading stood at 49.8, edging up 0.4 points from 49.4 in March.

Local banks continue to experience strong headwinds amid macroeconomic weakness in the region. Despite the rising pressure, DBS Group Holdings reported strong earnings of $1.2 billion, beating the average estimate of $1.04 billion as well as outperforming smaller rivals Oversea-Chinese Banking Corporation and United Overseas Bank.

Oil prices fell for a third straight session on Tuesday, pulling back from 2016 peaks on expectations of new record high inventory levels. West Texas Intermediate for June delivery slipped more than 5 percent since hitting 2016 highs last week, closing at $43.65 a barrel on the New York Mercantile Exchange. Renewed concerns about weaker Chinese demand and growing global supplies also weighed on the market. Oil prices fell to 13-year lows earlier this year amid fears that slowing economic growth in China, the second largest oil consumer, could reduce oil demand.

The US dollar reversed losses from a one-year low as investors brace for an interest rate hike in June. The greenback climbed the most since December as Federal Reserve Bank of Atlanta President Dennis Lockhart raised the possibility of two rate rises this year.

Lockhart noted that the economy has been sending mixed signals since the start of 2016, with solid consumer fundamentals not showing through in domestic demand data and wage growth still tepid. However, Lockhart added that strong jobs gain is favoured over the growth data as the more reliable signal of the health of the economy.

Keep your eyes peeled as the next Fed policy meeting on 14 and 15 June 2016 will reveal the policy makers decisions.

Equipped with a bachelor in banking and finance, Joey covers the finance, technology and healthcare industry in Singapore.

Please click here for more information about this author.

DBS Group Hldgs  20.610 +0.09 +0.44%   
Business: [FY16 Turnover] Institutional banking (45.4%), consumer banking/wealth management (37.2%), treasury (9.9%), others (7.5%).

Insight: Aug-17, 1H17, Co achieved record net profit of $2.... Read More
Oversea-Chinese Banking Corp  11.150 +0.07 +0.63%   
Business: [FY16 Turnover] Global corporate/investment banking (36.1%), global consumer/private banking (33.4%), insurance (11.1%), OCBC Wing Hang (10.8%), global treasury & mkts (8.3%), others (0.3%).

Insight: Jul-17, 1H17 net interest income climbed 1.9% desp... Read More
United Overseas Bank  23.470 +0.21 +0.90%   
Business: [FY16 Turnover] Group retail (45.2%), group wholesale (44%), global markets & investment management (6.4%), others (4.4%).

Insight: Jul-17, 1H17 net interest income rose 7% to $2.7b,... Read More


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