Equities 

Source: All data are sourced from Lion Global Investors and Bloomberg as at 31 May 2023 unless otherwise stated. *All figures stated in US Dollars.

Fixed Income

Source: All data are sourced from Lion Global Investors and Bloomberg as at 31 May 2023 unless otherwise stated. *All figures stated in US Dollars.

Macro & Markets

Resilient US economy

• The US economy continues to prove its resilience, with better-than-expected data across retail sales, industrial production and manufacturing production. Despite the recent banking crisis, the latest Fed’s Senior Loan Opinion Survey shows little signs of a credit crunch. Furthermore, there are also early signs of stabilization in the housing market after the aggressive policy tightening since last year.

US Debt Ceiling

• US President Biden and Republican House Speaker McCarthy struck a deal to raise the US debt ceiling and prevent a default in June. That said, the US Treasury could now issue hundreds of billions of new bonds to refill its coffers which could potentially be a major drag on liquidity in the US.

Central banks close to end of tightening cycle

• US Federal Reserve hiked interest rates by 25 basis points in May and removed guidance toward further hikes to assess the impact of credit tightening on the economy. The European Central Bank also downshifted to a 25 basis points pace despite strong inflation readings. Central banks are likely close to the end of the tightening cycle even though the battle to lower inflation is far from over.

Movers & Shakers

Artificial Intelligence (AI) stocks are moving the US stock market

• US large-cap AI-related stocks have contributed to the strong performance of the US stock market year-to-date (YTD). Investors’ interest in all-things AI-related is further boosted by Nvidia’s blowout first quarter and bullish second quarter sales outlook on accelerating data center investments.

Japanese equities reached a 33-year high

• The Japanese stock market has reached a 33-year high as investors scramble to cover their persistent underweight positions. Key reasons cited for the strong performance include Tokyo Stock Exchange’s request to companies whose share prices trading below their book value to make plans to improve their corporate value and the return of inflation.

China equities market weak on slowing economic recovery

• Weak China economic data in April has raised concerns about the sustainability of post reopening recovery. Industrial production and retail sales missed consensus estimates; youth unemployment rate hit a historical high of 20.4%; and property sales during the Labor Day holiday were lackluster. We expect policy to turn more supportive should economic growth slows further.

Recent Releases

Articles

• Interview Transcript – Japan Market Update
• Singapore Property – Why We Are Not Surprised by ABSD Hike
• Interview Transcript – Asian Bond Market Update

Podcasts & Videos

• Japan Market Update – Exciting Changes Ahead
• Podcast with Wee Ban Yew – Japan Market Update
• Singapore Real Estate Market Update

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