Stronger Singapore Dollar Could Boost Equities Market — Market Talk

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0259 GMT - A firmer Singapore dollar amid higher inflation could boost the city-state's equities market performance, Citi analysts say in a note. The higher inflation outlook from rising oil prices could drive the Singapore central bank to tighten its monetary policy that it manages through a currency band, they say. This could result in a stronger Singapore dollar, which should boost capital flow to the city-state. This and liquidity boosts from the central-bank-led equity market development program keep the Singapore equities market well-supported, despite its benchmark index outperforming most Southeast Asian peers over the past six months in U.S. dollar terms, the analysts add. Citi's top picks include Seatrium, Genting Singapore, DBS Group and SATS. (megan.cheah@wsj.com)

0251 GMT - The Singapore dollar consolidates against its U.S. counterpart in Asian trading, but could be weighed by higher oil prices spurred by the Middle East conflict. Asian currencies are vulnerable to higher costs of energy import, RBC Capital Markets' Abbas Keshvani says in a report. "Importers are scrambling to substitute their Middle Eastern suppliers, who supplied Asian economies with 40%-80% of their crude oil imports before the war," the Asia macro strategist says. The U.S. dollar is little changed at S$1.2779. (ronnie.harui@wsj.com)

0243 GMT - A former Reserve Bank of Australia board member says the central bank is mandated to respond to the energy prices shock now rewriting its forecasts for inflation. Economist Warwick McKibbin says that inflationary expectations need to be the focus of the costs and benefits of monetary actions, he writes in a social media post. The RBA is "mandated" to respond if no other policy actions are taken domestically, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

0230 GMT - The oil-price surge reinforces a "higher for longer" rates narrative at the Fed, StoneX's Matt Simpson says in commentary. While Fed officials are widely expected to leave rates unchanged at this week's meeting, rising energy prices could complicate the rate-cut outlook, the senior market analyst says. The longer the Strait of Hormuz stays "technically hostile," the greater the chance that oil prices stay higher for longer, which also translates to a higher-for-longer narrative for the Fed's policy rate, he says. If the Fed reinforces this narrative, the U.S. dollar could stay supported as markets reassess the central bank's monetary policy trajectory, Simpson says. The U.S. dollar index is 0.2% higher at 99.929, LSEG data show. (ronnie.harui@wsj.com)

0224 GMT - Bitcoin investors are watching whether this week marks an inflection point or merely a temporary bounce in a broader risk-off environment, with recent data suggesting the former, says Rachael Lucas, crypto analyst at BTC Markets. She notes bitcoin has risen about 10% over the past week, showing signs of decoupling from the S&P 500 and gold. A five-day ETF inflow streak totaling $767 million, whale holdings reaching a six-year high and a stablecoin market at record capitalization all support a structural case for bitcoin and the broader digital asset market. "Bitcoin's behavior during last week's macro stress event looked less like a speculative asset and more like a non-correlated store of value," Lucas adds. BTC Markets says investors should watch ETF inflows, whether bitcoin reaches $73,000, and whether the decoupling trend persists. (jason.chau@wsj.com)

0222 GMT - Thailand's tourism-heavy economy is vulnerable to the impact of the Middle East conflict, RBC Capital Markets' Abbas Keshvani says. The Southeast Asian country is by far the most tourism-dependent economy in Asia, as it marked a significant drop in arrivals from Europe and North America in the first week of March. "There may be further declines in [tourist] arrivals given the dramatic spike in kerosene prices and the impact of this on airfares," says the Asia macro strategist. (amanda.lee@wsj.com)

0201 GMT - The Thai baht could depreciate against the dollar in the near term, forex strategists at OCBC Group Research say in a report. Following a recent surge in energy prices, markets have pared back expectations for the Fed's rate cuts in the near term, which has supported the greenback, the strategists say. Also, an oil-price surge "represents a negative terms-of-trade shock for Thailand as a net energy importer," adding further pressure on the baht, they say. Moreover, Thailand's policymakers have previously signalled a preference for a weaker baht to better reflect underlying economic fundamentals, they add. The dollar is 0.5% higher at 32.47 baht after touching 32.59 baht on Monday, the highest level since November 2025, LSEG data show. (ronnie.harui@wsj.com)

0116 GMT - The BOJ is likely to deliver a hawkish hold at this week's meeting amid rising energy costs and recent yen weakness, ANZ Research's Brian Martin says in a research report. "We expect the BOJ to signal it is prepared to adjust interest rates as appropriate and is watching exchange rate developments," the head of G3 economics says. "We continue to anticipate the BOJ will raise interest rates 25bp at the April policy meeting, taking the policy rate to 1.0%," Martin says. Immediate challenges facing Japan's economy are stagflationary--higher input costs boost inflation and are bad for growth, Martin adds. (ronnie.harui@wsj.com)

0050 GMT - Asian currencies mostly weaken against the dollar on the risks of a prolonged Middle East conflict. The U.A.E.'s defense ministry said it was dealing with missile attacks and incoming drones from Iran. "For currency markets, the key takeaway is that prolonged disruption to Middle Eastern oil supply could keep energy prices elevated," says Fawad Razaqzada, market analyst at FOREX.com, in an email. "That risk premium should underpin the U.S. dollar, particularly if investors remain cautious about the broader economic impact on regions that rely heavily on oil imports," the analyst adds. The dollar edges 0.1% higher to 159.20 yen and is 0.2% higher at 1,492.40 won, LSEG data show. (ronnie.harui@wsj.com)

0018 GMT - The Australian dollar is likely to rise "modestly" against its U.S. counterpart if the RBA raises its policy rate today, two members of CBA's Global Economic & Markets Research team say in a note. This is because a rate hike isn't fully priced, the members say. "Markets are currently pricing around a two-thirds chance of an increase today," they say. The RBA's communication is expected to be more hawkish compared to the other central banks that also meet this week, the members add. The Australian dollar is 0.1% lower at $0.7063, LSEG data show. (ronnie.harui@wsj.com)

0013 GMT - JGBs are steady in early Tokyo trade before today's auction of about 800 billion yen of 20-year JGBs by Japan's Finance Ministry. Mild short-covering needs among investors could emerge, SMBC Nikko Securities' Miki Den says in a research report. However, "many investors are likely to want to remain on the sidelines amid major uncertainty," the senior Japan rates strategist says. "We would not expect a strong result even if the market builds in concessions considering off-the-run issues with remaining maturity of around 20y have not been strong recently," the strategist adds. The 20-year JGB yield is unchanged at 3.145%.(ronnie.harui@wsj.com)

2352 GMT - The Reserve Bank of Australia seems to be using a good cop, bad cop routine in order to signal its intentions ahead of policy meetings. Deputy Gov. Andrew Hauser has been given the bad cop badge, having scared markets last week with hawkish comments, triggering a shift in pricing for a rate hike to March from May. On the other hand, Gov. Michele Bullock is more cautious, and she likes to wait for data to shape the case for policy change. It's likely that Bullock, prior to the Middle East conflict, had been prepared to wait for May and the release of 1Q CPI data. (james.glynn@wsj.com; X @JamesGlynnWSJ)
source: https://www.tradingview.com/news/DJN_DN20260316010981:0/