Ahead Today
G3: US ADP employment, ISM services index, JOLTS report, factory orders, durable goods orders; eurozone CPI
Asia: Thailand CPI, Taiwan CPI
Market Highlights
Markets kick off the year in risk-on mode, shrugging off geopolitical headlines such as US President Trump’s capture of Venezuelan leader Maduro. The S&P 500 closed at record highs, while industrial metals like copper and nickel rallied, signalling optimism around global growth. In Asia, the KOSPI surged to a new all-time high, buoyed by AI enthusiasm and strong Korean semiconductor export data for December.
On FX, the US Dollar Index (DXY) has found near-term support around 98.00, with EURUSD showing signs of weakness. However, USD upside remains constrained for now amid market expectations for further Fed rate cuts. Fed’s Miran called for over 100bps of rate cuts this year, citing restrictive monetary policy. Meanwhile, the final S&P Global US services and composite PMIs held in expansionary territory at 52.5 and 52.7, reinforcing economic resilience in December.
Looking ahead, the ADP employment report and ISM services survey later today will offer fresh insight into labour market and growth momentum. There could be a modest rebound in private payrolls after November’s contraction, while ISM services could stay in expansion.
Regional FX
Asian FX shows early-year divergence. SGD, MYR, and THB have outperformed since the start of the year, while PHP, KRW, and IDR have lagged behind. USDCNY remains below the key 7.00 level, with the PBOC continuing to guide the daily fixing lower, providing tailwinds for currencies closely linked to CNY moves.
We expect measured resilience in SGD, supported by solid economic growth, likely keeping the MAS on hold at its January policy meeting. While the S&P Global Singapore Whole Economy PMI eased to 54.1 in December from 55.4 in November, it remains firmly in expansionary territory. The ringgit also benefits from resilient domestic growth, strong electrical and electronics exports, and contained inflation.
Conversely, we stay cautious on THB following its surprising pace of gains since late 2025, given tighter checks on gold-related FX transactions and a softer growth outlook for this year. These factors could potentially limit further baht upside.