OCBC Daily Treasury Outlook (28 Aug 2026)

Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 1 By Global Markets | 28 August 2026 Daily Treasury Outlook Highlights Global: US equities closed higher overnight, led by a strong rally in technology shares. Sentiment was partly lifted by strong results and guidance from Nvidia, which reinforced confidence in continued AI-related demand. On geopolitics, oil prices moved higher after the Wall Street Journal reported that President Trump was not interested in returning to the terms of a June agreement with Iran. Brent was up over 2% at around USD89.4 per barrel. Qatar’s prime minister was in Tehran for talks aimed at reviving diplomatic efforts, but uncertainty around the Strait of Hormuz remains elevated. On the US data front, initial jobless claims fell by 4k to 203k in the week ended 22 August, below consensus of 208k and marking a second consecutive weekly decline. Continuing claims also fell by 18k to 1.78mn. Separately, the advance goods trade deficit widened sharply to USD118.8bn in July from USD101.4bn in June, as exports fell 2.9% while imports rose 3.7%, led by a surge in capital-goods imports. At Jackson Hole, several Fed officials maintained a cautious tone on inflation. Kansas City Fed President Jeffrey Schmid said current policy did not appear sufficiently restrictive, while Cleveland Fed President Beth Hammack reiterated that she remains willing to act against persistent inflation. Chicago Fed President Austan Goolsbee also warned that inflation remains the main near-term risk, although Boston Fed President Susan Collins continued to see gradual disinflation as the most likely path. Market Watch : This morning, Tokyo CPI rose 1.9% YoY in August from 1.8% in July, in line with consensus. For the day ahead, the Philippines will release July trade data and later in the US, the main focus will be Fed Chair Kevin Warsh’s Jackson Hole address, particularly for any guidance on the inflation and policy outlook. The BLS will also release its preliminary annual benchmark revision to nonfarm payrolls, which could materially alter the picture of US employment growth over the past year. Major Markets HK: The residential property market lost momentum in July, with the official residential price index declining by 0.5% MoM (0.2% MoM in June), bringing an end to a 13-month winning streak. Meanwhile, rental index rose further in July, albeit at a moderated pace of 0.8% MoM (1.0% MoM in June). In the first seven months of 2026, housing prices and rents still recorded cumulative gains of 7.3% and 3.4% respectively. Market activity weakened markedly, with total residential transactions falling 41.7% MoM to 4,462 cases, highlighting a sharp deterioration in buyer participation. ID: Commission XI of the House of Representatives approved Destry Damayanti as Bank Indonesia governor for the 2026 to 2031 term, succeeding Perry Warjiyo, who resigned on 25 July. The commission also approved Aida S. Budiman as senior deputy governor and selected Solikin M. Juhro as deputy governor following two days of fit and proper tests. Commission XI Chairman Mukhamad Equity Value % chg S&P 500 7731.0 0.7% DJIA 53569 0.2% Nikkei 225 66132 -0.2% SH Comp 3956.6 1.1% STI 5684.1 -0.7% Hang Seng 25566 -0.3% KLCI 1741.7 -0.4% Value % chg DXY 99.159 0.0% USDJPY 159.39 0.1% EURUSD 1.1653 0.0% GBPUSD 1.3593 0.0% USDIDR 17726 0.1% USDSGD 1.2713 0.0% SGDMYR 3.1707 0.0% Value chg (bp) 2Y UST 4.23 2.27 10Y UST 4.68 2.97 2Y SGS 1.65 0.80 10Y SGS 2.31 2.38 3M SORA 1.16 0.41 3M SOFR 3.64 0.02 Value % chg Brent 89.70 2.1% WTI 83.53 1.6% Gold 4599 0.2% Silver 69.25 1.6% Palladium 1354 2.1% Copper 14283 0.2% BCOM 140.09 0.8% Source: Bloomberg Key Market Movements Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 2 By Global Markets | 28 August 2026 Misbakhun said their appointments will proceed to a parliamentary plenary session on 1 September 2026. MY: The overall business confidence indicator rose to 5.9% in 3Q26 from negative 1.8% in 2Q26, with improvements across industry, construction and wholesale and retail trade, while services remained optimistic at 5.2%, according to DOSM. Businesses also remained optimistic about conditions in July to December 2026, with the overall net balance rising to 12.9% from 7.9% for April to September 2026, led by construction at 23.3%, industry at 14.3% and services at 13.1%. For 3Q26, 31.9% of respondents expect gross revenue to rise, while 78.3% expect to retain their current workforce. PH: Bangko Sentral ng Pilipinas (BSP) raised its policy rate by 25bp to 5.00% in line with consensus and our expectations. In our view, BSP’s stance remains hawkish, given the upside risks to inflation. BSP noted that growth fundamentals remain intact despite the recent weakness in the growth outlook. We are less optimistic about the growth outlook, forecasting 2026 GDP growth at 3.2%. Nevertheless, we expect BSP to remain focused on keeping price pressures contained. Our baseline remains for a further cumulative 50bp of rate hikes by BSP for the remainder of 2026. AU: Household spending rose 1.1% MoM in July, marking a third consecutive monthly increase following a revised 1.0% gain in June. On an annual basis, spending accelerated to 7.0% YoY sa, the strongest pace since June 2023. The increase was broad-based, with all nine spending categories recording gains, led by clothing and footwear (+1.6%) and recreation and culture (+1.5%). Services spending rose 1.5% MoM, while goods spending increased 0.7%, with strength particularly evident across recreation, catering, and other services. The ongoing strength in household spending suggests consumer demand remains resilient despite higher borrowing costs. Sustainability SG: The Singapore Economic Development Board (EDB) and the Infocomm Media Development Authority (IMDA) have provisionally allocated 200 MW of new capacity to four data centre (DC) operators, namely Digital Realty, Equinix, Keppel Data Centres and ST Telemedia Global Data Centres. These DCs have committed to exceed the minimum sustainability requirements and will power more than 50% of their DC capacity from green energy sources, while also being best-in-class in energy efficiency by adopting advanced technologies such as liquid cooling and using energy-efficient IT equipment. To enable more sustainable DC operations, JTC is developing a low-carbon DC park on Jurong Island, where shared infrastructure and low-carbon technology synergies could enhance operational efficiency. Credit Market Updates Market Commentary: • The SGD SORA OIS curve traded higher yesterday with the shorter tenors trading flat to 4bps higher, belly tenors trading 4bps higher, and the 10Y tenor trading 3bps higher. Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 3 By Global Markets | 28 August 2026 • US Investment Grade and US High Yield spreads tightened by 1bps and 2bps to 78bps and 263bps respectively. Bloomberg Global Contingent Capital spreads tightened by 2bps to 205bps. • Bloomberg Asia USD Investment Grade spreads traded flat at 57bps, and the Asia USD High Yield spreads tightened by 1bps to 328bps. (Bloomberg, OCBC) New Issues: • There were no issuances in the Singdollar market yesterday. • The total issuances in the APAC and DM IG markets were both zero yesterday. Credit Developments: • CNOOC Ltd: Strong 1H2026 profitability, cost control and liquidity, with higher revenue and production, low all-in costs, net cash, manageable shareholder distributions and modest bond repurchase, though oil-price volatility, investment spending and distribution policy remain key credit sensitivities. • UBS Group AG: The SNB reiterated support for requiring UBS to fully capitalise its foreign subsidiaries with high-quality CET1, reinforcing its existing stance ahead of the legislative vote due to UBS’s increased systemic importance following the Credit Suisse acquisition . • Qantas Airways Ltd: FY2026 revenue increased, but higher fuel and operating costs weakened earnings and interest coverage; leverage remains healthy, although elevated fleet-renewal capex is expected to increase debt, without changing OCBC’s fundamental credit view. • FWD Group Holdings Ltd: FWD delivered solid 1H2026 growth in sales, margins and operating profit while maintaining stable leverage and strong investment quality, although its solvency ratio declined mainly due to Japan’s new ESR regime and adverse market movements . • Prudential PLC : Prudential reported higher 1H2026 new business profit and margins, improved investment performance and robust capitalisation, supporting increased share buybacks and continued growth across its core Asian markets . • Sembcorp Industries Ltd: Sembcorp Green filed for a potential India IPO of up to INR37.5bn, comprising new shares with no divestment by Sembcorp Industries, and proceeds expected mainly to repay subsidiary debt, subject to market conditions and approvals . Equity Market Updates US: US stocks advanced Thursday, led by technology, after Nvidia's chief financial officer forecast approximately 70% revenue growth in the fiscal year ending January 2028, allaying concerns about the durability of the AI spending cycle. The S&P 500 rose 0.7%, the Nasdaq gained 1.6%, its largest single-day advance in three weeks, and the Dow edged up 0.2%, though notably 70% of S&P 500 members declined, underscoring the narrowness of the rally. Nvidia surged nearly 9%, lifting chipmakers broadly, whilst Salesforce also posted robust second-quarter earnings growth. Conversely, defensive sectors including utilities and communication services sold off on rotation into technology. Workday fell around 6% in after-hours trade as its results and guidance disappointed, whilst Marvell slid approximately 7% post-market despite beating estimates, having already surged over 180% year-to-date. Treasury yields rose Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 4 By Global Markets | 28 August 2026 two to three basis points across maturities, with the 10-year climbing to 4.67%, as investors positioned ahead of Fed Chair Kevin Warsh's debut Jackson Hole speech on 28 Aug 2026, a closely watched event given hawkish signals from Fed officials Hammack and Schmid, who both argued current rates are insufficiently restrictive. The USD44b 7-year note auction cleared at 4.512%, the highest yield since December 2024, though demand was broadly in line with expectations. In Hong Kong, Shein priced its IPO at HKD48.56 per share, raising approximately HKD13.6b, equivalent to USD1.7b, valuing the fast-fashion retailer at around USD26b, a sharp discount to the roughly USD100b valuation it commanded four years ago. Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 5 Equity and Commodity Day Close % Change Day Close Index Value Net change DXY 99.159 -0.01% USD-SGD 1.2713 DJIA 53,569.44 105.56 USD-JPY 159.39 0.05% EUR-SGD 1.4814 S&P 7,730.99 55.29 EUR-USD 1.165 0.02% JPY-SGD 0.7975 Nasdaq 26,541.35 411.15 AUD-USD 0.719 0.33% GBP-SGD 1.7279 Nikkei 225 66,131.98 -130.18 GBP-USD 1.359 -0.01% AUD-SGD 0.9146 STI 5,684.12 -37.47 USD-MYR 4.033 0.16% NZD-SGD 0.7565 KLCI 1,741.72 -6.82 USD-CNY 6.720 -0.03% CHF-SGD 1.5806 JCI 6,521.75 116.07 USD-IDR 17726 0.08% SGD-MYR 3.1707 Baltic Dry 3,056.00 130.00 USD-VND 26083 -0.06% SGD-CNY 5.2876 VIX 14.51 -0.70 Tenor EURIBOR Change Tenor USD SOFR Tenor SGS (chg) UST (chg) 1M 2.2480 0.00% 1M 3.6822 2Y 1.65 (+0.01) 4.23(--) 3M 2.5540 0.35% 2M 3.7225 5Y 1.95 (+0.02) 4.4 (+0.04) 6M 2.7660 0.14% 3M 3.7575 10Y 2.31 (+0.02) 4.67 (+0.03) 12M 3.0070 0.60% 6M 3.8710 15Y 2.36 (+0.02) -- 1Y 4.0269 20Y 2.36 (+0.01) -- 30Y 2.42 (+0.01) 5.19 (+0.03) Meeting # of Hikes/Cuts % of Hikes/Cuts Implied Rate Change Expected Effective Fed Funds Rate SOFR 3.64 09/16/2026 0.399 39.900 0.100 3.731 10/28/2026 0.645 24.600 0.161 3.793 12/09/2026 1.039 39.400 0.260 3.891 Secured Overnight Fin. Rate Foreign Exchange SOFR Government Bond Yields (%) Fed Rate Hike Probability Energy Futures % chg Soft Commodities Futures % chg WTI (per barrel) 83.53 1.6% Corn (per bushel) 5.103 -0.7% Brent (per barrel) 89.70 2.1% Soybean (per bushel) 12.565 0.2% Heating Oil (per gallon) 427.87 0.4% Wheat (per bushel) 7.428 1.7% Gasoline (per gallon) 338.42 1.9% Crude Palm Oil (MYR/MT) 45.930 -0.8% Natural Gas (per MMBtu) 2.91 2.3% Rubber (JPY/KG) 4.600 1.4% Base Metals Futures % chg Precious Metals Futures % chg Copper (per mt) 14283 0.2% Gold (per oz) 4599 0.2% Nickel (per mt) 16878 -0.1% Silver (per oz) 69.25 1.6% Source: Bloomberg, Reuters Commodities Futures Economic Calenda Date Time Country Code Event Period Survey Actual Prior Revised 8/28/2026 6:00 NZ ANZ Consumer Confidence Index Aug -- 98 99.3 -- 8/28/2026 7:30 JN Tokyo CPI YoY Aug 1.90% 1.90% 1.80% -- 8/28/2026 7:30 JN Tokyo CPI Ex-Fresh Food YoY Aug 1.80% 1.80% 1.70% -- 8/28/2026 7:30 JN Tokyo CPI Ex-Fresh Food, Energy YoY Aug 2.00% 2.00% 1.80% -- 8/28/2026 7:30 JN Jobless Rate Jul 2.50% 2.40% 2.50% -- 8/28/2026 7:30 JN Job-To-Applicant Ratio Jul 1.19 1.18 1.18 -- 8/28/2026 9:00 PH Exports YoY Jul 18.30% -- 24.10% -- 8/28/2026 9:00 PH Imports YoY Jul 17.50% -- 19.60% -- 8/28/2026 9:00 PH Trade Balance Jul -$5153m -- -$4940m -- 8/28/2026 15:30 TH Gross International Reserves 21-Aug -- -- $280.9b -- 8/28/2026 17:00 EC Economic Confidence Aug 97.5 -- 96.9 -- 8/28/2026 17:00 EC Industrial Confidence Aug -5.1 -- -6.1 -- 8/28/2026 17:00 EC Services Confidence Aug 4.9 -- 4.7 -- 8/28/2026 17:00 EC Consumer Confidence Aug F -15.5 -- -15.5 -- 8/28/2026 18:30 IN Industrial Production YoY Jul 6.00% -- 7.30% -- 8/28/2026 21:45 US MNI Chicago PMI Aug 57.9 -- 57.6 -- 8/28/2026 22:00 US U. of Mich. Sentiment Aug F 51 -- 51 -- Source: Bloomberg