US Inflation Data and Treasury Buybacks in Focus Amid Global Economic Developments

Markets are focused on the upcoming US inflation data print, especially after Fed Chair Warsh signaled that further policy action may be needed if inflation does not move clearly and sufficiently toward the 2% target.

Last week's nonfarm payrolls surprised to the upside, rising 162k (vs 55k consensus) with unemployment holding at 4.1%. The Treasury's larger long-end buybacks are also on watch, though it is unlikely to materially change the outlook for longer-term yields given persistent fiscal deficits and reduced Fed holdings in the Treasury market.

Singapore's manufacturing activity expanded for a 13th straight month in August, with PMI hitting a near eight-year high of 51.5, driven by AI-related demand. Strong 1H26 exports and factory output prompted private economists to raise Singapore's 2026 GDP growth forecast to 5% from 3.5%. This is according to the Monetary Authority of Singapore's latest quarterly survey of professional forecasters.

HSBC remains constructive on long-duration Chinese government bonds, noting that upcoming price and loan data could signal further growth moderation and therefore support these bonds. China's money market conditions eased at the start of September as bond issuance dropped, with net central and local government, as well as policy bank bond issuance near zero versus RMB412bn the previous week.

The ICBC CSOP CGB ETF S$ (CYC.SG) YTD NAV rose +2.28% in CNY; +6.51% in USD, while $CSOP STAR&CHINEXT50 SGD (SCY.SG)'s underlying fund's top 10 holdings include companies such as MediaTek and MUFG.