Nicholas TeoFed Speak
Last night's market action across all major asset class smacks of short covering and reversals from this past week's move.
With the Fed's removal of the 'patient' language from its statement, suggesting that interest rate increases could start as soon as June or any meeting from then on, the FOMC also indicated that the rate lift-off won't need to be presented with a steep upward trajectory thereafter, but will instead depend on further labour market improvement and inflation indicators going forward.
In her press conference, Mrs Yellen indicated that not being patient does not mean they are getting impatient either. She sees rate hikes as data dependent, and may or may not start in June.
The prospect of a more dovish Fed led to a massive sell down of the USD and sparked the unwinding of positions that had been tied to a rate move as soon as June. This has taken the pressure off other currencies, enabling gold, EUR, CAD, AUD and others to rebound in a major way. EUR/USD took a big run at $1.1000 on the news.
The USD drop has also led to a rebound in a number of commodity markets which are priced in USD, particularly crude oil and gasoline which have gained about 6%, with WTI driving back toward the $45.00 level.
US 10-year treasuries continued to climb, with yields breaking back down to below 2%.
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ezyCommerce is a fully integrated e-commerce fulfilment offering, designed to help small and medium-sized enterprises (SMEs) kick-start or grow their online business. Singapore's e-commerce market is forecast to grow from S$1.1 billion in 2010 to a S$4.4 billion this year. By offering this 'aggregator to aggregator' role, this vertical diversification upwards would make complete sense when paired with the company's logistics and fulfilment capabilities. While this continued push will bring the company up a gear in the e commerce arena, good execution remains critical. SingPost's stock has been languishing at these levels for some time and it risks breaking below the upward channel that was established since August 2014. If the stock manages to break back up into the channel, an upside test of around S$2.13 is possible. However, should this move down confirm a breakdown, then S$1.85 is a key support. Cathay Pacific (HKSE): Meanwhile Cathay Pacific in HK reported full year 2014 numbers yesterday. They beat estimates at the top line but came in short at the bottom line. One significant reason for the miss is miscalculated fuel hedging. During the company's earnings briefing officials disclosed that as much as 60% of their fuel needs have been hedged between US$82 to US$95 per barrel over the next four years. Noble Corp (SGX): In a positive 'sign of endorsement', Invesco Asset Management, an independent fund manager declared on the SGX website last night that they have picked up 17 million shares of Noble Corp over the past days at an average price of S$0.9295 per share. This is the first significant purchase reported by a professional fund house since the Iceberg saga broke for Noble. |
