Elevated volatility throughout the week expected - what else is ahead?
🔻Equity markets are taking a beating this morning, with the key Asian indices of Nikkei and Hang Seng down 1% as of 915AM while Singapore is down 2.1%
🔝Put warrants tracking Singapore shares and the SIMSCI dominate the top movers table this morning with gains of 17% to 150% while call warrants over names such as SIA and DBS are down up to 67.5%
🦺Investors are offloading risk on the back of the US-Israeli war against Iran and piling into haven assets, defensive names and oil-related shares
🔼The rare stock gainers this morning include ST Engineering (+1.3%, $10.10) and Wilmar (+1.4%, $3.57)
‼The Middle East conflict and its impact on oil and inflation particularly compounds concerns in the US after overnight producer prices came in higher than expected
❓What else should investors take note of in the coming week?
🌙Tonight: US ISM Manufacturing Index for February is expected to moderate to 51.8. In January, the index saw a strong gain, rising by 4.7 points to 52.6 and crossing above the threshold of 50 for the first time in 12 months, signalling an expansion in the manufacturing sector
2⃣Tue: Japan's Unemployment Rate for January is expected to have remained steady at 2.6%. Recent indicators of labor market conditions have been mixed, with PMI employment data picking up and labor shortages rising (Tankan survey), while job openings have been trending lower.
3⃣Wed night: US Fed Reserve Beige Book will provide insights into current US economic conditions and business sentiment
4⃣Thu: China's National People's Congress (NPC) will commence, with policymakers announcing policy targets for 2026. Last December's Politburo meeting indicated that policymakers are content with the current situation and feel no urgency to step up stimulus. As such, the NPC is unlikely to deliver significant policy changes. On the first day of the meeting, policymakers may announce this year’s GDP growth target as ‘4.5–5%', lower than last year’s ‘around 5%.’
5⃣Fri night: US Retail Sales for January, US Employment report for February and Non-farm Payrolls will be released. Unemployment Rate is expected to rise to 4.4% while payrolls is projected to slow to 60K, down from January's +130K. Given that these employment reports are the last to be released before the FOMC’s March meeting, they will shape expectations around its next policy decision
✴Investors keen on using put warrants to hedge against the short-term volatility can refer to the list of available put warrants here: https://warrants.com.sg/tools/warrantsearch/?underlying=all&maturity=all&expiry=all&type=put&effectiveGearing=all&indicator=all&moneyness=all&issuer=MBL
✳While those who believe that the ongoing geopolitical conflict may be limited and are looking to buy into this dip can consider using call warrants to leverage on short-term rebounds using either stock or index call warrants: https://warrants.com.sg/tools/warrantsearch/?underlying=all&maturity=all&expiry=all&type=call&effectiveGearing=all&indicator=all&moneyness=all&issuer=MBL
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