Market Update: 29th May 2014

Hi All, Tonight's focus would be on the US market. We saw the US market finally making some pullback after 4 continuous sessions of rally. Markets as of 12.30SGT: All Ordinaries 5,503.20 -3.50 (-0.06%); Shanghai Composite 2,050.54 +0.31 (+0.02%); Hang Seng 23,186.78 -56.77 (-0.21%), Nikkei 225 14,679.71 +8.76 (+0.06%), Straits Times index 3,301.23 +29.39 (+0.9%), Dow Futures Jun 14 16,649 +21, S&P 500 jun 14 1,911.20 +2.10 Euro Falls to 3-Month Low on German Unemployment Gain; Yen Rises. Euro fell to more than 3 months' low against the dollar as German unemployment unexpectedly increased this month, where euro lending contracted, probably boosting the case for more European Central Bank stimulus. Europe's shared currency weakened after a measure of money supply in the 18-nation region, known as M3, grew less than estimated, stoking speculation the ECB will cut interest rates when policy makers meet on Jun 5th. Citigroup, after correctly raising outlook for the Aussie dollar earlier this year more aggressively than other firms, sees little reason to back off its bullish stance even as its peers call for caution. Australian dollar may benefit from China diversifying its currency reserves. U.S. sale of $35 billion of 5 year notes drew lowest yields in 6 months, as a European bond rally bolstered the demand of U.S. govt securities. Notes yield at 1.513% at auction yesterday, least since Nov 2014. Bid-to-cover ratio, measuring demand through the comparison of total bids with amount of debt offered was 2.73, vs the average 2.65 in the past ten sales GBP fell for 2 days against the dollar, reaching the lowest level in 6 weeks. Investors believed the rally that helped push the pound to a 4.5 year high was excessive. GBP slid for a 4th day versus the Eur, longest losing streak since March. U.K. bonds rose, pushing 10-year yield down the most in 2 weeks, as government debt securities across Europe edged higher China intensifies move to claim over the South China Sea has given fresh impetus to a military buildup in Indonesia, seeing its forces deployed with greater focus on external risks.

Samuel Tay