OCBC Daily Treasury Outlook (12 Aug 2026)

Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 1 By Global Markets | 12 August 2026 Daily Treasury Outlook Highlights Global : US equities slipped on Tuesday as an intraday reversal erased early- session gains. Sentiment initially improved on reports of progress in Oman-Iran talks, but reversed after Iran reiterated that the Strait of Hormuz would remain closed until its conditions are met. On US data, the NFIB Small Business Optimism Index rose 2.4 points to 99.8 in July, the highest since August 2025. Labour-market indicators within the survey were notably firm. The employment index rebounded 1.9 points to 102.1 after four consecutive monthly declines, sending a somewhat contrasting signal to the recent nonfarm payroll data. The share of firms planning to create new jobs over the next three months jumped 9 points to 20%, the highest since October 2022, while the proportion reporting unfilled job openings rose to its highest level since June 2025. Labour shortages were evident across both skilled and unskilled positions. However, the apparent tightening in the small-business labour market has yet to translate into stronger wage pressures, with compensation plans remaining near cycle lows. Price pressures also eased, as the share of firms planning to raise prices declined for a second consecutive month after peaking in May. Overall, the NFIB survey does not point to a renewed build-up in inflationary pressure. The absence of labour-driven inflation reduces the urgency for the FOMC to tighten immediately, although inflation remains the more important policy consideration at this stage. Chicago Fed President Austan Goolsbee reinforced that message, arguing that inflation remains the economy's key challenge rather than a collapse in employment or industrial activity. However, Goolsbee is not an FOMC voter this year. Elsewhere, the Reserve Bank of Australia kept the cash rate unchanged at 4.35% for a second consecutive meeting, as widely expected, following three rate hikes earlier this year. Governor Michele Bullock nevertheless maintained a hawkish tone, noting that inflation risks remain skewed to the upside and that further tightening remains possible. Updated forecasts, however, showed lower inflation and a higher unemployment rate, while recent inflation and survey indicators have generally been softer than the RBA's rhetoric would suggest. With the RBA itself describing policy as slightly restrictive and unemployment likely to rise gradually as growth cools, the tightening cycle is probably over unless inflation delivers a meaningful upside surprise. Market Watch: For today, attention will centre on the US July CPI report, alongside the final July inflation readings for the euro area. Equity Value % chg S&P 500 7728.2 -0.3% DJIA 53792 -0.3% Nikkei 225 66970 0.0% SH Comp 3934.1 -0.8% STI 5754.2 1.0% Hang Seng 25653 -1.1% KLCI 1731.5 -0.2% Value % chg DXY 99.828 0.0% USDJPY 159.28 0.0% EURUSD 1.1542 0.0% GBPUSD 1.3507 0.0% USDIDR 17840 0.4% USDSGD 1.2797 0.0% SGDMYR 3.1944 -0.1% Value chg (bp) 2Y UST 4.21 -2.72 10Y UST 4.69 -1.84 2Y SGS 1.71 1.40 10Y SGS 2.32 1.03 3M SORA 1.12 0.11 3M SOFR 3.63 0.03 Value % chg Brent 88.91 1.4% WTI 83.20 1.3% Gold 4370 -0.5% Silver 64.68 -1.6% Palladium 1368 -1.2% Copper 14157 0.0% BCOM 134.76 0.1% Source: Bloomberg Key Market Movements Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 2 By Global Markets | 12 August 2026 Major Markets CN: According to the China Passenger Car Association (CPCA), retail passenger vehicle sales fell 20.9% YoY to 1.461 million units in July, pointing to a sharp weakening in domestic auto demand. NEV retail sales proved relatively resilient, declining by just 3.9% YoY to 951,000 units and lifting the NEV penetration rate to a record 65.1%. In contrast, conventional ICE vehicle sales plunged 41% YoY to 510,000 units, highlighting the accelerating structural shift towards electrification. External demand remained a key bright spot. NEV passenger vehicle exports surged 147.8% YoY to 540,000 units in July, reinforcing exports as an increasingly important growth engine for China’s auto industry amid softer domestic sales. ID: Danantara is preparing to acquire a stake in the Indonesia Stock Exchange through PT Danantara Investment Management as part of the exchange’s ongoing demutualization process, with the size of the shareholding still being finalized, as reported by Antara News. The agency is coordinating with the Financial Services Authority and the IDX Board of Directors, while the demutualization framework under Law No. 4 of 2026 gives state representatives through Bank Indonesia, the Finance Ministry, and Danantara priority to acquire exchange equity. The Financial Services Authority is drafting the implementing regulation, with completion targeted for the second week of September 2026, while Danantara expects the demutualization process to be completed within the next few months. MY: The unemployment rate stood at 3.0% in June 2026, unchanged from May, as the number of unemployed persons increased by 0.9% MoM, or 4.4k, to 517.8k. The number of employed persons increased by 0.01% MoM, or 2.3k, to 16.83mn, driven mainly by the services sector, particularly transportation and storage, accommodation and food and beverage services, and wholesale and retail trade, while manufacturing and construction also rose but agriculture and mining and quarrying declined. The labour force expanded by 0.04% MoM, or 6.7k, to 17.34mn, with the labour force participation rate holding steady at 70.9%. AU: The RBA left the cash rate unchanged at 4.35% at its August meeting, marking a second consecutive hold following three rate hikes earlier this year. The Board judged the current policy stance to be sufficiently restrictive and opted to assess how the economy responds to the cumulative tightening already delivered. It also noted that inflation is not expected to return to the midpoint of the target range until late 2027. Nevertheless, the RBA retained a hawkish bias, emphasising that inflation remains above target and reaffirming its willingness to raise rates further should upside risks materialise. Governor Bullock also reiterated that aggregate demand must remain subdued to alleviate capacity constraints and ensure inflation returns sustainably to target. Australia's NAB business confidence edged lower to -6 index points in July from - 5 in June, as renewed uncertainty surrounding the Iran conflict weighed on sentiment. Despite softer confidence, business conditions improved marginally to +4 index points from +3 previously, although the reading remains below its long-run average. The improvement was driven by stronger employment and profitability, while forward orders and capital expenditure remained well below historical norms, pointing to a more cautious business outlook. Capacity utilisation also rose sharply to 83.0%, suggesting underlying activity remains Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 3 By Global Markets | 12 August 2026 relatively resilient despite subdued sentiment. Overall, the outlook remains uncertain, with upside risks to costs persisting even as aggregate demand continues to soften. Sustainability SG: The Singapore Sustainable Aviation Fuel Company Ltd. (SAFCo), with support from the Civil Aviation Authority of Singapore (CAAS), and nine participating companies announced the successful delivery of Sustainable Aviation Fuel (SAF) under Singapore’s first voluntary SAF procurement trial. The SAF was procured through SAFCo’s demand aggregation model and supplied into Changi Airport’s fuel distribution network, demonstrating how SAF demand from multiple corporate buyers and airlines can be consolidated through a single procurement mechanism, enabling more efficient and cost-effective access to SAF. Following the SAF delivery, SAFCo is working with stakeholders and registry partners to complete the verification, registration and issuance of SAF environmental attribute certificates. The milestone marks a significant step in strengthening operational capabilities, systems and processes required to support Singapore’s broader SAF adoption plans and the implementation of its national SAF policy. Credit Market Updates Market Commentary: • The SGD SORA OIS curve traded higher yesterday with the shorter tenors trading 3bps higher, belly tenors trading 4bps higher, and the 10Y tenor also trading 4bps higher. • US Investment Grade spreads widened by 1bps to 78bps, and US High Yield spreads widened by 2bps to 267bps. Bloomberg Global Contingent Capital Index widened by 4bps to 205bps. • Bloomberg Asia USD Investment Grade widened by 1 bps to 56bps, and the Asia USD High Yield spreads widened by 2bps to 328bps. (Bloomberg, OCBC) New Issues: • There were USD450mn of issuances in the Singdollar market yesterday led by HSBC Holdings PLC, who priced a USD450mn 6NC5 bond at 2.95%. • The total issuances in the APAC and DM IG markets were USD500mn and USD30.6bn respectively (prior day: USD100mn and USD27.7bn respectively). The largest issuance from DM IG markets was led by Jane Street Group/JSG Finance Inc (priced USD14.625bn across three tranches). (Bloomberg, OCBC) Credit Developments: • Swire Pacific Limited (SWIRE): SWIRE delivered strong 1H2026 results with record first-half recurring underlying profit, improved credit metrics and ample liquidity, supported by stronger property, beverage and aviation earnings, with a stable outlook underpinned by recovery in HKSAR, resilient Chinese Mainland retail and conservative financial policy. • GuocoLand Ltd (GUOLSP): GUOLSP and its JV partner Intrepid won the Berlayar Drive land parcel for SGD576.8mn, with GUOLSP holding a 40% stake in the project. Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 4 By Global Markets | 12 August 2026 • Singapore Exchange Limited (SGXSP): SGX reported strong FY2026 revenue and profit growth driven by cash equities, FX and commodities, with higher EBITDA, improved net cash and lower debt/EBITDA while maintaining its 6-8% medium-term revenue growth guidance. • Sembcorp Industries Ltd (SCISP): SCISP’s utilities subsidiary received conditional approval for a 300MW renewable power import project from Malaysia to Singapore, supported by a large floating solar and battery storage development expected to begin operations in 2029. • ESR-REIT (EREIT): EREIT faces tenant arrears and potential vacancy risk from ACFS, which contributes about 5.2% of effective gross rents, though bank guarantees reduce near- term arrears and OCBC’s view of EREIT’s credit profile remains unchanged, while the REIT also agreed to sell 15 Gul Way for SGD24.2mn. • PTT Global Chemical Public Company Limited (PTTGC): PTTGC saw a temporary but broad-based 2Q2026 EBITDA recovery, positive free cash flow and sharply improved leverage, though the improvement should be viewed cautiously as much of the uplift was linked to Middle East-driven supply disruptions and timing gains. • Ho Bee Land Ltd (HOBEE): HOBEE reported stronger 1H2026 earnings driven by Australian development settlements and resilient property investment income, with stable net gearing, though London asset enhancements and significant refinancing needs may pressure near- term cash flow. • Westpac Banking Corporation (WSTP): Westpac’s 3QFY2026 update showed solid operating performance with higher earnings, stable margins, resilient asset quality, prudent provisioning and a strong CET1 ratio well above regulatory benchmarks despite a softer economic outlook. • Fraser and Neave Ltd (FNNSP): FNNSP reported decent 9MFY2026 results as higher PBIT offset lower FX-affected revenue, with beverage profit growth and improved publishing performance mitigating weaker dairies, while credit metrics remain manageable despite slightly higher net gearing. Equity Market Updates US: US stocks fell for a second consecutive session on Tuesday, as pre-CPI caution and a persistent Strait of Hormuz impasse weighed on sentiment, with the S&P 500 declining 0.3%, the Nasdaq shedding 0.6%, and the Dow losing 0.3%. Communication services and real estate led sector declines, with Alphabet and Amazon among the notable laggards, whilst energy and utilities held firmer. WTI crude settled near USD83 per barrel after Iran reiterated the strait would remain closed until its conditions were met, rebuffing earlier optimism from Pakistan's defence minister who had suggested a deal was close; the back-and- forth kept oil volatile and inflation expectations elevated ahead of Wednesday's July CPI print. Fed Chicago President Goolsbee separately described inflation as "the biggest problem facing our economy right now," reinforcing the cautious tone. Treasuries edged higher, with yields falling 2 to 3 basis points across the curve; the USD58b 3-year note auction drew solid demand at a yield of 4.291%, the highest for that tenor since February 2025, with a bid-to-cover of 2.71 versus 2.60 previously. In corporate news, Nvidia announced a USD500b financing coalition with Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 5 By Global Markets | 12 August 2026 KKR to fund AI infrastructure. On the regional front, Singapore-based Sea Ltd. raised its Shopee full-year EBITDA forecast to USD1b after second-quarter revenue beat estimates, and DayOne Data Centres reportedly filed confidentially for a USD5b US IPO, aiming to list as soon as next quarter . Follow our podcasts by searching ‘ OCBC Research Insights ’ on Telegram! 6 Equity and Commodity Day Close % Change Day Close Index Value Net change DXY 99.828 0.02% USD-SGD 1.2797 DJIA 53,791.85 -184.13 USD-JPY 159.28 -0.01% EUR-SGD 1.4776 S&P 7,728.20 -24.91 EUR-USD 1.154 -0.01% JPY-SGD 0.8033 Nasdaq 26,445.45 -159.91 AUD-USD 0.706 0.10% GBP-SGD 1.7285 Nikkei 225 66,970.22 1363.51 GBP-USD 1.351 0.00% AUD-SGD 0.9036 STI 5,754.17 55.74 USD-MYR 4.092 0.02% NZD-SGD 0.7525 KLCI 1,731.46 -3.91 USD-CNY 6.746 -0.01% CHF-SGD 1.5781 JCI 6,267.88 -97.49 USD-IDR 17840 0.44% SGD-MYR 3.1944 Baltic Dry 3,083.00 -6.00 USD-VND 26137 -0.09% SGD-CNY 5.2695 VIX 15.28 -0.18 Tenor EURIBOR Change Tenor USD SOFR Tenor SGS (chg) UST (chg) 1M 2.1750 -1.18% 1M 3.6444 2Y 1.71 (+0.01) 4.21(--) 3M 2.4750 0.04% 2M 3.7080 5Y 2.01 (+0.15) 4.39 (-0.02) 6M 2.6620 -0.78% 3M 3.7541 10Y 2.32 (+0.01) 4.69 (-0.02) 12M 2.9050 0.24% 6M 3.8720 15Y 2.37 (+0.01) -- 1Y 4.0236 20Y 2.39 (+0.01) -- 30Y 2.46 (+0.02) 5.24 (-0.01) Meeting # of Hikes/Cuts % of Hikes/Cuts Implied Rate Change Expected Effective Fed Funds Rate SOFR 3.63 09/16/2026 0.481 48.100 0.120 3.751 10/28/2026 0.745 26.400 0.186 3.818 12/09/2026 1.172 42.700 0.293 3.924 Secured Overnight Fin. Rate Foreign Exchange SOFR Government Bond Yields (%) Fed Rate Hike Probability Energy Futures % chg Soft Commodities Futures % chg WTI (per barrel) 83.20 1.3% Corn (per bushel) 4.368 -0.3% Brent (per barrel) 88.91 1.4% Soybean (per bushel) 11.475 -0.9% Heating Oil (per gallon) 425.25 1.5% Wheat (per bushel) 6.303 -1.6% Gasoline (per gallon) 313.66 0.0% Crude Palm Oil (MYR/MT) 45.620 0.4% Natural Gas (per MMBtu) 2.77 -1.0% Rubber (JPY/KG) 4.490 2.4% Base Metals Futures % chg Precious Metals Futures % chg Copper (per mt) 14157 0.0% Gold (per oz) 4370 -0.5% Nickel (per mt) 16830 -0.6% Silver (per oz) 64.68 -1.6% Source: Bloomberg, Reuters Commodities Futures Economic Calenda Date Time Country Code Event Period Survey Actual Prior Revised 8/12/2026 7:00 SK Unemployment rate SA Jul 2.70% 2.80% 2.70% -- 8/12/2026 7:50 JN Money Stock M2 YoY Jul -- 2.20% 2.20% -- 8/12/2026 7:50 JN Money Stock M3 YoY Jul -- 1.40% 1.50% -- 8/12/2026 14:00 JN Machine Tool Orders YoY Jul P -- -- 52.70% -- 8/12/2026 18:30 IN CPI YoY Jul 4.40% -- 4.38% -- 8/12/2026 19:00 US MBA Mortgage Applications 7-Aug -- -- -2.90% -- 8/12/2026 20:30 US CPI MoM Jul 0.10% -- -0.40% -- 8/12/2026 20:30 US Core CPI MoM Jul 0.20% -- 0.00% -- 8/12/2026 20:30 US CPI YoY Jul 3.40% -- 3.50% -- 8/12/2026 20:30 US Core CPI YoY Jul 2.50% -- 2.60% -- 8/12/2026 20:30 US Core CPI Index SA Jul 336.766 -- 336.065 -- 8/12/2026-8/15/2026 CH Money Supply M2 YoY Jul 7.90% -- 8.00% -- 8/12/2026-8/15/2026 CH Money Supply M1 YoY Jul 3.90% -- 4.00% -- 8/12/2026-8/15/2026 CH Money Supply M0 YoY Jul -- -- 11.80% -- Source: Bloomberg