Singapore’s headline inflation rate dropped to its lowest level since September 2021, registering at 2.7% for March. This figure was below the 3.4% reported in February and fell short of the 3% forecasted by economists surveyed by Reuters. The city-state also saw a decrease in its core inflation rate, known as the “MAS core inflation measure,” which excludes accommodation and private transport costs, sliding to 3.1% from 3.6% in the previous month.
India experienced a surge in business activity, reaching its highest rate in 14 years in April. The composite purchasing managers index rose to 62.2, surpassing the 61.4 projected by economists. Both the manufacturing and services sectors showed faster-than-expected growth, with PMI figures at 59.1 and 61.7, respectively. Pranjul Bhandari, HSBC’s chief India economist, attributed the strong performance to increased new orders, noting that growth in India was broad-based across sectors.
Chinese bubble tea company, Chabaidao, saw a significant decline of 30% in its Hong Kong trading debut, with shares trading well below the IPO offer price. Chabaidao’s IPO, the largest in Hong Kong this year, raised 2.59 billion Hong Kong dollars. The company allocated 90% of its shares in a global offering, with the remaining 10% available in Hong Kong, although the public offer was only 0.5 times subscribed, prompting a reallocation of shares to the global offer.
Japan’s business activity expanded at its quickest pace in eight months, based on flash figures from au Jibun bank. The country’s composite purchasing managers index rose to 52.6 from the previous month, driven by improvements in both manufacturing and services PMI. While the manufacturing sector saw a softer decline, the services sector experienced growth, highlighting a positive trend in Japan’s economic activity.
The Japanese yen hit a fresh 34-year low against the U.S. dollar, weakening to 154.85 before slightly rebounding. The currency’s weakness may be a point of concern for the Bank of Japan ahead of their upcoming meeting. Meanwhile, Australia reported a significant uptick in business activity, reaching its fastest pace in 24 months, with the composite purchasing managers index at 53.6. Although manufacturing and services PMI showed some variation, the overall trend pointed towards expansion.
In the energy sector, heightened geopolitical tensions influenced volatility in crude oil prices. Despite the challenges posed by oil market fluctuations, strategist Stephen Ellis from Morningstar identified selective bargains within the energy space. Ellis emphasized the importance of patience and highlighted opportunities for investors as energy stocks rebound from previous lows.
U.S. crude oil prices remained steady near $83 after Iran’s announcement that it would not escalate conflict with Israel. The West Texas Intermediate contract for May settled at $82.85 a barrel, while June Brent futures settled at $87 a barrel. Despite a 3% drop the previous week, both benchmarks have shown significant gains since the beginning of the year.
Ned Davis Research recommended a reduction in exposure to U.S. bonds as Federal Reserve rate cuts are delayed. Investors were advised to pivot towards European and Japanese bonds as the U.S. economy remains strong and inflation levels persist. The firm’s global fixed income allocation model shifted from an overweight to a market weight position for U.S. bonds to reflect the changing economic landscape.