Your bite-sized weekly update (8 Oct)

THIS WEEK IN MARKETS

The US market started the week with the best two-day gain since 2020. 

But the rally proved short-lived as higher oil prices driven by OPEC production cuts and continued strength in employment numbers dashed investors’ hopes of a quick reversal in the Fed’s aggressive interest rate hikes. 

Most economists are now expecting the Fed to increase interest rates by another 0.75 percentage points in November. 

There are three things that we’d be watching out closely for in the coming week.

1. Whether US consumer prices remain high 
2. Whether the MAS will tighten Singapore’s monetary policy further 
3. How US banks perform as they start reporting their 3Q earnings

Amidst these major events, there’ll also be an upcoming auction for the Singapore 6-month and 1-year T-bill. Still unsure which one you should subscribe to? Read our analysis here

IMPORTANT

• Still too hot. The US added 263,000 jobs in September, higher than market expectations of 250,000 jobs. The unemployment rate in the US continued to decline, highlighting strength in the jobs market and reducing the likelihood that the Federal Reserve will waver on its aggressive interest rate hikes. 
• No more chips. The US government published a set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment. The move is widely seen to be aimed at slowing China's technological and military advances. 
• Less oil means more inflation? The Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to reduce their oil output by 2 million barrels a day from November. Nigeria said that OPEC wants to keep oil prices at above US$90 per barrel, going against President Biden's efforts to lower oil prices ahead of the midterm elections. 

ICYMI

• Tesla (TSLA) reported that it produced 365,000 vehicles and delivered 343,000 vehicles in the third quarter, falling below analysts’ forecasts.
• Elon Musk revived a bid to buy Twitter (TWTR) at the original price of $54.20 a share, reversing his previous attempts to quit the deal and potentially avoiding a legal fight.
• Peloton (PTON) announced it would cut another 500 jobs, or about 12% of its remaining workforce following several previous rounds of job cuts.
• Chinese electric vehicle makers - Li Auto, Nio, and XPeng faced growing investor concerns of slowing ordering activity. 
• SATS aims to ‘reduce’ size of the rights issue, says CEO in a Business Times interview, after sell-off over fears of potential S$1.7b cash call
• Yangzijiang Shipbuilding secured new orders for 22 vessels, including 12 16,000 twenty-foot equivalent unit (TEU) liquefied natural gas dual-fuel containerships. This would bring its total orderbook to US$10.27 billion.
• Home loan rates in Singapore reached up to 3.85% per annum, a level not reached in many years. The rates are 0.75-0.77% higher than for earlier fixed-rate packages that were withdrawn from the market in late September. Read our analysis here.
• Fixed deposit rates in Singapore have been going up as banks continued with aggressive promotions. Read our analysis here.
• The 10-year average interest rate on the November issue of the Singapore Savings Bonds reached a record high of 3.21%. Read our analysis here.
• Cryptocurrency exchange Binance suspended its blockchain network on Friday after hackers went away with more than $100 million worth of its BNB token. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

Singapore Savings Bonds 10-year interest rate at record high of above 3%. Time to buy? [October 2022]

The 1-year and average 10-year interest rates for the latest November 2022 Singapore Savings Bond (SSB) have risen to above 3%.

WHAT’S UP THIS WEEK

Thursday, 13 Oct 

• Singapore: 6-month Treasury bill auction/ 1-year Treasury bill auction
• US: Consumer Price Index (CPI) data

Friday, 14 Oct 

• Singapore: MAS October 2022 Monetary Policy Statement (10th-14th Oct)
• US: Citigroup, Morgan Stanley earnings

Source: SGX, Bloomberg, Refinitiv

THAT’S INTERESTING

Influencer Kim Kardashian agreed to pay $1.26 million in fines to the US Securities and Exchange Commission to settle charges that she touted a cryptocurrency token on social media without disclosing how much she was paid for the promotion. (Source: NBC News)