Focus is on upcoming economic data

It appears that there are no clear winners in the US-China trade war, as markets around the world, including in the US, were dragged down at the end of last week by signs of slowing Chinese economic growth.

Robust export data earlier in the week had failed to dispel worries about the trade tariffs' impact on the Chinese economy, as analysts chalked it up to front-loading activities from traders rushing shipments to the US before higher tariffs kick in next year.

Last Friday, China's producer price index showed that factory-gate inflation slowed for a fourth month in October on cooling domestic demand and lower manufacturing activity.

"When you look overseas, there are not just concerns about a global slowdown but a global recession that might be brewing," Mr Jerry Braakman, chief investment officer of California-based First American Trust, told Reuters.

"When overseas markets slow down, the US economy might be okay, but global corporations, with currency translation and revenue growth challenges, get hit," he said.

US markets slid on the news, with the Dow Jones Industrial Average closing lower for the first time in five days.

It lost 0.8 per cent to 25,989.30, while the S&P 500 fell 0.9 per cent to 2,781.01. The Nasdaq plunged 1.7 per cent to 7,406.90.

As Singapore prepares to host several regional summits in a busy week ahead, geopolitics and economic data will weigh on investors' minds, although the next political event most likely to move markets remains the meeting between US and China leaders at the G-20 summit later this month.

Leaders from Asean countries as well as China, Japan, South Korea, Russia and the US are in Singapore this week for the 33rd Asean Summit, the Asean Business and Investment Summit and the 13th East Asia Summit, as well as other Asean bilateral and multilateral summits.

The week will conclude with Singapore handing over the Asean chairmanship to Thailand, the 2019 chair.

TENSIONS

As data releases stream in over the next few days, investors should view them through the lens of trade tensions, noted IG Markets analyst Pan Jingyi.

"With the passing of the turbulent October inviting citing of year-end and post-midterm rallies, it is worth remembering that we still have the issue of US-China trade tensions to contend with," she said. "This is over and above the threat of tightening conditions."

The US' October consumer price index on Wednesday is expected to report an uptick, supporting the US Federal Reserve's plans for further interest rate hikes.

Ms Pan noted: "The impact from US-China tariffs may be present as contributors among items such as rental prices that could trigger an increase in price growth and keep the Fed going."

Other highlights from the US are October advance retail sales (Thursday) and industrial production (Friday).

China will release its remaining October data this week, including monetary aggregates and loans (tomorrow), retail sales, industrial production and fixed asset investment (Wednesday) and ending with new home prices on Thursday.

In Singapore, the September retail sales data will be out today and last month's non-oil domestic exports (Nodx) figures will be released on Friday.

UOB Global Economics and Markets Research expects a significant 10 per cent year-on-year contraction for Nodx, compared with 8.3 per cent growth in September.

This would come on the back of a steeper decline for electronics and a significant high base effect as Nodx expanded 20.5 per cent year-on-year in September last year.

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