US Economy

Treasury 10-year yields sink to 3-year low, haven assets rally

SINGAPORE (Aug 26): Haven assets reigned as traders returned to their desks Monday after an action-packed weekend that saw tensions between the US and China ratchet up again.

Treasury 10-year yields dropped below 1.5% to their lowest since Aug 2016, while the yen rallied as investors ramped up their bid for safety amid concerns that a bruising trade war will hamper global growth. The Turkish lira led a decline among emerging-market currencies.

New phase of monetary policy easing starting; rate cuts won't have same impact as before

SINGAPORE (July 1): In December 2015, the US Federal Reserve raised interest rates for the first time in a long while. This ended the unprecedented era of ultra-accommodative monetary policies deemed necessary to resuscitate economies after the 2008/09 global financial crisis (GFC).


How different assets perform in an economic slowdown

(June 19): It appears that the US is entering the slowdown phase of the economic cycle. But what might that mean for returns across asset classes? And can a recession be avoided?

For the first time in two years, the Schroders US output gap model is signalling a change in the US business cycle. It suggests the economy is moving from “expansion” to “slowdown” (the other two stages in the cycle being “recession” and “recovery”).

Trump is slowing US economic growth

SINGAPORE (June 10): For some time, the four horsemen of US macroeconomic policymaking have been taxation, regulation, trade and infrastructure. Having studied the first in detail, I have found tax cuts to be a positive contributor to economic growth. Though I have considered the second area in less detail, the evidence suggests that regulation is, at best, only a minor contributor to growth. The third area is very important, which is why today’s trade tensions are so worrying.


The US' illusions of growth

SINGAPORE (May 27): National politics in the US has become enslaved to macroeconomic indicators that have little bearing on true well-being. For many commentators, the snapshot growth rate of 3.2% for the first quarter of 2019, coupled with a decline in the unemployment rate to 3.6% in April, implies that President Donald Trump’s economic policies have been vindicated, and some suggest that his re-election chances have improved as a result.


US equity funds are top performers for 2018 but 2019 may be a different story

SINGAPORE (Dec 24): The US economy enjoyed one of its most robust performances when it reported its fastest rate of GDP growth in nearly four years in 2Q2018. The strong growth, which was driven by higher fiscal spending and tax cuts, should have extended the bullish run seen in US equities over the last few years. Instead, trade tensions with China and fears of a US slowdown have taken the wind out of the sails for US equities.

Mnuchin called top US bank executives on market stability

WASHINGTON (Dec 24): Treasury Secretary Steven Mnuchin called top executives from the six largest US banks over the weekend, he said Sunday on Twitter, a move that followed heavy losses in the stock market last week and a partial federal government shutdown.

Singapore's 2019 gaming industry to suffer spillover effects of VIP weakness: Fitch

SINGAPORE (Nov 27): Fitch Ratings has identified Singapore to be among the markets vulnerable to weakness from China's VIP gamblers, resulting in a flat VIP segment next year.

This is considering how Singapore’s gross gaming revenue (GGR) declined 3% on-year in 1H18 after growing 14% in 2017, with the recent weakness largely driven by the slowing VIP segment across Southeast Asia and facing higher competition from expansions in the Philippines as well as other newer markets.

Fed's Powell says US outlook 'remarkably positive'

BOSTON (Oct 3): US Federal Reserve Chairman Jerome Powell on Tuesday hailed a “remarkably positive outlook” for the US economy that he feels is on the verge of a “historically rare” era of ultra-low unemployment and tame prices for the foreseeable future.

It is a view, he said, based on how a changed economy is operating today, with businesses and households immunized by strong central bank policy from the inflationary psychology that caused unemployment, inflation and interest rates to swing wildly in the 1960s and 1970s.

EM equities supported as business cycle normalises

SINGAPORE (Feb 12): It appears increasingly obvious that the traditional business cycle is returning after more than a decade of quantitative easing across developed markets, says Neo Teng Hwee, chief investment officer and head of investment products and solutions at UOB Private Bank. The business cycle — that is, the ebb and flow of economic growth that occurs over time — was disrupted by the global financial crisis, and then the QE years as central banks experimented with ways to propel economies out of recession.

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