STI set for lower open

The index is expected to come in around 0.5% lower.

IG Markets Singapore noted:

Weekend releases showed that the Chinese Trade Balance was better than expected at $27.7 billion in September, consensus had expected $20.7 billion and August's data had $26.7 billion.

Exports in September grew 9.9% from a year earlier, roughly twice the 5.0% expected by investors and a marked increase from the 2.7% annual rise seen in August. Imports rose 2.4% year-on-year in September, in line with expectations which had forecast a recovery from August's 2.6% annual decline, which surprised the market last month.

As this data is digested we could have expected to see a slightly firmer start to the week for risk assets. The aussie, as ever closely linked to the fortunes of China's resource hungry economy, initially moved higher than where it closed for the weekend. However that move was short lived and equities are currently marginally weaker.

Friday's session in the US saw equities finish the week on a soft note and risk currencies drift lower, finishing the day flat and well off from their early highs.

Friday's US data releases saw Michigan consumer sentiment survey print better than expected but that did little to lift the mood.

In energy markets the tug of war between the fundamentals of slowing global demand and the tension in the Middle East continues to play out, with International Energy Agency reducing its forecast for global demand in 2012 and 2013.

Data released last week also showed that crude supplies rose in the US and this seems to be a trend that may continue as both US and Middle East production is on the increase, while the slow growth will mean muted demand for the black gold continues.

The main themes for this week are likely to be focused around the EU summit, which starts on Thursday in Brussels, with many hoping for further developments from the region on the situations for both Greece and Spain. However, it is unlikely we will see much in the way of progress at this meeting.

This is despite the fresh impetus given to the region from the somewhat surprising award of the Nobel Peace Prize to the EU on Friday.

In awarding the prize the talk was focussed on the unity and the achievements over the last 60 years, seemingly dismissing the current crisis and other issues that the union has failed to prevent in its tenure.

While at times a difficult and imperfect union it is worth remembering the two World Wars the emanated from the region at the start of the twentieth century and the relative peace since.

However, the effects of the current crisis has the potential to be as dangerous and far reaching as any war and we are in no means out of the woods yet. With leaders’ decision making being called in to question throughout the crisis and many suggesting not enough was done at the start, the decision to award the region a Nobel Peace Prize is seen by many as strange.

For that reason this award might in fact do more to unite the euro skeptics than the union itself.

We are currently looking at a lower open in Singapore, with STI expected to come in around 0.5% lower.