The Week Ahead: DBS Group, UOB and OCBC Eyed

So now we know. The US Federal Reserve will start to shrink the size of its swollen balance sheet from October. It will begin by retiring $10 billion worth of bonds next month.

As the winding down of the Fed’s bond holdings continues, it will most likely be keeping an eye on key US economic indications. The weekly jobless claims could be one of them. Last week, 259,000 Americans filed for unemployment benefit. It is expected to drop to 236,000 this time.

China is seething after rating agency, S&P’s, downgraded the country’s bonds. The argument against a downgrade is that China is a developing economy. As such, the models used in developed economies do not apply….

….The extent of China’s development will be on show at the end of next week. The second-largest economy in the world will report purchasing managers’ indices for its manufacturing and non-manufacturing sectors.

Japan will report inflation numbers for August. Despite the Bank of Japan’s best efforts to stoke inflation, consumer prices are still refusing to rise. In August, the headline inflation rate was 0.4%, while core inflation only increased 0.5% from a year ago.

The European Union will report inflation numbers too. The rate at which prices are rising in the Euro at 1.5% is only a tad below the long-run average of 1.99%. So it raises the question as to why the interest rate is still stick at 0%.

Inflation will also be on the agenda in Singapore. The headline inflation rate in the Garden City was 0.6% in August. It is expected to rise to 0.9% this time. The core inflation rate was significantly higher at 1.6%.

And finally, investors could be eyeing the latest loans extended by Singapore banks. In July, collective lending by banks that include DBS Group (SGX: D05), OCBC (SGX: O39) and UOB (SGX: U11) fell to a three-month low of S$632.9 billion.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned. The Motley Fool Singapore has recommended UOB.