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By Margaret Yang, CMC Markets
Equities – Asian equity markets rebounded sharply yesterday, led by the Nikkei 225 which rallied 3.6%. Nikkei futures continued to go higher after the cash market closed. Market sentiment shifted to the positive side as crude oil recovered its losses and stands above $40 again.  The US market finished higher as IBM delivered better-than-expected 1Q earnings.
Singapore’s earnings season will kick off this week. Local investors and traders will be watching 1Q earnings results of the biggest local companies in the coming weeks to find a clue on how economic headwinds have affected corporate earnings. The sentiment is optimistic, as the Straits Times Index advanced 34 points or 1.1% to its highest level this year ahead of earnings season. It has broken out through the key resistance level of 2,917 and this has opened the door for potential upside momentum with the next resistance level at 3,038.
Chinese companies accelerated the pace in the overseas M&A race. According to an unidentified source, the country’s sovereign fund – China Investment Corp – has expressed interest in buying Yum! Brands Inc.’s Chinese business, which includes over 7000 KFC and Pizza Hut restaurants on the mainland. This deal is potentially valued at $7-8 billion.
Commodities – Crude oil futures rebounded as the strike in Kuwait continued to dampen crude output in the short term. US crude futures settled 3.3% higher at $41.08 per barrel. The panic associated with the failure of the Doha meeting will gradually fade away and the market will start to look forward. Gold continued to trade in a range bound between $1,220 – $1,260. However, a potential “head and shoulder” pattern has formed, which warns of potential downside if earnings season brings positive surprises that quench the demand for safe-haven assets.
Foreign Exchange (FX) – The US Dollar Index has fallen for the third day, approaching a key support level at 94.00. A weaker USD sent other currencies higher, with AUD/USD trading at 10-months highs. USD/JPY has rebounded to 109.10 this morning. The immediate support level is 107.65 and the resistance is 110.00. USD/CAD retraced back to 1.2770 as the oil price rebound lifted commodity currencies. AUD/USD extended its rally and hit 0.7800 this morning, a fresh high this year. USD/SGD also pulled back to the 1.3400 area.
US Dollar Index June 2016
market_usdollar
Earnings Calendar for Singapore blue chips

Company Name Date Period EPS Estimate
CapitaLand Ltd 20/4/2016 Q1 2016 0.05
Singapore Exchange Ltd 20/4/2016 Q3 2016 0.085
Sembcorp Marine Ltd 27/4/2016 Q1 2016 0.021
United Overseas Bank Ltd 28/4/2016 Q1 2016 0.435
Oversea-Chinese Banking Corp Ltd 29/4/2016 Q1 2016 0.215
Jardine Cycle & Carriage Ltd 29/4/2016 Q1 2016 0.54
Yangzijiang Shipbuilding Holdings Ltd 29/4/2016 Q1 2016 0.15
DBS Group Holdings Ltd 3/5/2016 Q1 2016 0.42
Sembcorp Industries Ltd 4/5/2016 Q1 2016 0.058
StarHub Ltd 5/5/2016 Q1 2016 0.045
Ascendas Real Estate Investment Trust 5/5/2016 Y  2016 0.152
SIA Engineering Co Ltd 10/5/2016 Y  2016 0.162
Wilmar International Ltd 10/5/2016 Q1 2016 0.04
City Developments Ltd 11/5/2016 Q1 2016 0.14
Singapore Airlines Ltd 12/5/2016 Y  2016 0.669
UOL Group Ltd 12/5/2016 Q1 2016 0.115
Golden Agri-Resources Ltd 12/5/2016 Q1 2016  N.A.
Genting Singapore PLC 13/5/2016 Q1 2016 0.008
Singapore Telecommunications Ltd 13/5/2016 Y  2016 0.243
Singapore Technologies Engineering Ltd 13/5/2016 Q1 2016 0.04
SATS Ltd 13/5/2016 Y  2016 0.202
ComfortDelGro Corp Ltd 13/5/2016 Q1 2016 0.031
Thai Beverage PCL 13/5/2016 Q1 2016 0.29
Global Logistic Properties Ltd 19/5/2016 Y  2016 0.048

 
About the author
Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.

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