Last week, data released showcased a 0.9% m/m rise in US industrial production, exceeding the 0.3% estimate, thanks to a general increase in factory output. However, retail sales only slightly increased by 0.1% m/m, falling short of the 0.3% estimate, with previous months also revised downwards. Later in the week, economic data strengthened as initial claims dropped by 5k to 238k, though higher than the expected: 235k, easing worries about last week's significant increase and reinforcing the idea that recent volatility may be partly due to seasonal adjustments related to holidays and school vacations. May housing starts surprisingly reduced 5.5%, below the estimated 0.7% increase, as expectations of short-term rate cuts retreated. Elevated financing costs and continuous demand pressures ar

Last week’s FOMC meeting saw rates being held constant, with 2024 projections indicating a single cut and Chair Powell's stance being less dovish than recent meetings. The median 2024 projection showed one cut for this year, down from three in March. However, projections for 2025 and 2026 each indicate four cuts, up from three in March, maintaining a total of nine cuts over the next two and a half years, but with a delayed start and quicker catch-up after year-end. This is despite lower-than-expected May CPI where monthly increase in core CPI was 0.16% (expected: 0.3%), the lowest since August 2021, reducing the year-on-year rate from 3.6% to 3.4%. Headline PPI also dropped 0.2% in May (consensus: 0.1%), and the core index remained constant (consensus: 0.3%). Initial jobless claims unexpec

Last week’s economic data was mixed with most of the week indicating cooler labor market. However, last Friday, US jobs report came out strong, causing investors to reassess probability of future rate cuts. Job openings decreased by 296k in April to 8.06 million, nearing the pre-pandemic ratio of job openings-to-unemployed ratio at 1.24, close to February 2020's 1.22. Initial jobless claims for the week ending June 1 increased by 8k to 229k, exceeding the consensus estimate of 220k, though this upside surprise could be a result of seasonal adjustments. ADP employment report indicated a slower growth pace with a 152k rise in private payrolls in May, below the expected 175k. However, service surveys showed strength and return to expansion, with the May ISM services PMI survey reaching its hi

•Last week, US 1Q24 real GDP growth was revised downwards from 1.6% to 1.3% saar, matching consensus predictions, while the core PCE QoQ was revised from 3.7% to 3.6%. •Initial jobless claims also rose to 219k (vs 215k prior). Given that the latest Beige Book mentioned firms are retreating hiring expectations on weaker demand and uncertain macro environment, unemployment rate could increase. •Core PCE deflator probably moderated in April to the slowest monthly pace this year driven by sharp drop in airfares. •The slowdown in consumption and prices, coupled with the labor market slowdown, are strengthening the argument for the Fed to initiate rate cuts this year, though last mile inflation (due to major services categories depending on minimum-wage labor are feeling the effects of catch-up

•Last week, PPI data came in robust than expected as core PPI rose 0.5% in April (consensus: 0.2%). •Headline CPI increased by 0.3% m/m in April, slightly below expectations, while the core CPI matched predictions with a 0.3% rise. •Headline retail sales were flat in April (vs a downwardly revised 0.6% prior) which was lower than anticipated, suggested a potential weakening in the robust consumer demand that has been supporting the economy. •Last Friday, import price inflation was stronger-than-anticipated, with the headline index rising 0.9% in April, surpassing the 0.3% consensus. With that, 3 Fed officials advocated for maintaining high borrowing costs while waiting for signs of easing inflation, indicating no hurry to reduce interest rates. •As a result, despite swaps traders anticipat

We are thrilled that our esteemed Portfolio Manager of the largest China government bond ETF in the world, Bruce Zhang, recently participated in a panel discussion at the REITs Symposium, sharing valuable insights on the real estate market and answering some questions about our $CSOP iEdge SREIT ETF US$(SRU.SI)$ CSOP SRT ETF product. During the Q&A session, Bruce highlighted how SRT offers diversified exposure to the real estate sector, providing stability and growth potential for investors. They also discussed current market trends and the strategic advantages of including REITs in a balanced investment portfolio. Bruce also reminds us that as funding cost is going to peak, investors should be prepared for the rebound of S-REITs using

Last Wednesday, at the FOMC meeting, the Fed kept rates constant at 5.25%-5.50% for the sixth consecutive meeting. The dovish FOMC statement and less-hawkish-than-anticipated Powell’s Q&A emphasized that a rate hike is unlikely to be the next policy move. As predicted, the US Treasury maintained the coupon auction size while increasing TIPS sizes. The Treasury also announced no plans for cash management buybacks this quarter but initiated the liquidity support buyback program. Last Thursday’s data release indicate GDP cooled in Q1 while employment cost increased by the most in a year (+4.7% q/q), a sign that inflation is persistent, supporting the Fed’s hawkish pivot to keep rates high for longer than expected. Bond traders have shifted expectations for the first full Fed rate cut earl

US real GDP growth for 3Q was at 4.9% QoQ, above prior period and consensus estimates, due to robust consumption as personal consumption grew 4.0% QoQ. Initial jobless claims for week ending 21 Oct rose to 210k, despite a rise in payrolls by 336k jobs in September. This is because some workers took on several jobs. This highlights the cracks in the labor market. Nobel Laureate Paul Romer insisted that the Fed should begin lowering rates and that the Fed would be “crazy” to hike more. As such, markets are only pricing in 1/3 probability of another Fed hike in the current rate hike cycle. We expect CSOPUMM to continue to deliver stable yield. As of 20231027, the fund has gross yield at 5.73%^ and net yield at 5.30%. Source: CSOP, Bloomberg, as of 20231027. ^ Gross yield is based on ann

Recent economic indicators revealed that US retail sales surpassed expectations at +0.7% MoM and industrial production improved +0.3% MoM in September, while nonfarm payroll increases averaged 266k over the past 3 months. Despite the resilient economy, last Thursday, at the Economic Club of New York, Fed Chair Powell remarked that rates are at or near peak and expressed a definite intention of pausing rate hikes. Nevertheless, the Fed remains watchful. Quoting Powell’s words, “We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks”. Markets responded with a decline on 2Y treasuries yields. We expect CSOPUMM to continue to deliver stable yield.

The September CPI report revealed a 0.3% increase in the US core CPI (excluding food and energy costs) last month. As such, swap contracts increased the odds of another 25bp Fed hike to about 40% compared to around 30% on Wednesday. Moreover, it showcased imbalanced disinflation, with goods sector prices performing well while service sector disinflation has stalled. The Israel-Hamas conflict poses a significant risk of another Fed rate hike. Initial jobless claims for week ended Oct 7 stayed at 209k, below estimates of 210k, and the latest Kansas City Fed Index indicated the labor market significantly cooled to be in line with FOMC’s 2% inflation goal. However, it is worth noting the United Auto Workers strike has already resulted in layoffs in some states, and further job cuts are predict