A magnificent Monday to you as global stocks fell to a two-year low amid concern hawkish policies by global central banks.

In brief (TL:DR)

• U.S. stocks closed lower on Friday with the Dow Jones Industrial Average (-1.71%), the S&P 500 (-1.51%) and the Nasdaq Composite (-1.51%) all down.

• Asian stocks struggled to gain traction as negative sentiment persisted amid fears that major central banks will keep hiking rates until inflation is tamed, raising the risk of a recession.

• Benchmark U.S. 10-year Treasury yields decreased six basis points to 3.77% (yields fall when bond prices rise).

• The dollar swung between gains and losses versus major currencies.

• Oil rose with November 2022 contracts for WTI Crude Oil (Nymex) (+2.84%) at US$81.75 as OPEC+ mulls biggest production cut since pandemic.

• Gold was little changed with December 2022 contracts for Gold (Comex) (+0.10%) at US$1,673.60.

• Bitcoin (-0.57%) fell to US$19,232, failing to hold US$20,000 into the September monthly close.

In today's issue...

1. Singapore Home Prices Climb Despite Increased Borrowing Costs

2. Can a stronger dollar help to fuel M&A activity?

3. Bitcoin ATM Growth Drops for First Time

Market Overview

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The week’s cautious start comes after US stocks posted their third straight quarter of losses for the first time since 2009. Risk assets have been in a tailspin since the Federal Reserve delivered a third jumbo hike last month and officials repeatedly warned of more pain to come. Investors are now awaiting jobs data this week for further clues about the Fed’s rate-hike trajectory. Upcoming inflation and GDP readings will also provide details on whether price pressures are easing meaningfully. Asian markets struggled with Tokyo's Nikkei 225 (+1.07%) up, while Sydney’s ASX 200 (-0.27%) and Hong Kong's Hang Seng Index (-0.99%) were down and Korean market is closed for a holiday.

1. Singapore Home Prices Climb Despite Increased Borrowing

• Singapore real estate sales maintained a brisk pace of increase in the third quarter, driven in large part by foreign demand especially from North Asia as the financial center reopens.

• Private property values rose 3.4% from the previous three months, when they climbed 3.5% and prices also jumped 13.2% from a year earlier.

Last week saw over 302,000 spectators at the Singapore F1 Grand Prix, over 90,000 delegates at various other events, including Token 2049 and the Forbes CEO Conference, Singapore’s back in business in a big way, opening its stage in the biggest post-Covid party.

Which goes some way to explain why even as the U.S. Federal Reserve and other central banks take aggressive steps to contain soaring inflation, and borrowing costs in Singapore have surged alongside global rates, demand for real estate in the city-state remain insatiable.

Last week, Singapore authorities tightened housing loan limits to ensure borrowers are better able to afford higher rates, including imposing a 15-month waiting period for some buyers of resold units.

However, the moves aren’t likely to have a significant impact on home prices as Singapore real estate sales maintained a brisk pace of increase in the third quarter, driven in large part by foreign demand especially from North Asia as the financial center reopens.

According to flash estimates released by Singapore’s Urban Redevelopment Authority on Monday, private property values rose 3.4% from the previous three months, when they climbed 3.5% and prices also jumped 13.2% from a year earlier.

The price increases have come despite the three-month compound average Singapore overnight rate - used by banks to set interest rates for mortgages - jumping to about 2% from 0.2% at the start of the year.

Singapore’s buoyant housing market has largely defied a global downturn triggered by steep rate hikes which shows that some home buyers are discounting the risks of rising interest rates and possible economic slowdown.

Meanwhile, U.S. home values have dropped for the first time in a decade, while the once white-hot Sydney market saw prices slump for the eighth straight month in September.

Some analysts even forecast the Singapore home prices to climb between 7% and 9% for the whole of 2022 as demand outstrips supply and owing to the pandemic having delayed a slew of projects.

2. Can a stronger dollar help to fuel M&A activity?

• According to data from Refinitiv, U.S. mergers and acquisitions activity has dropped 40% year on year in volume with only US$1.2 trillion worth of transactions have been agreed so far this year.

• But some U.S. dealmakers are hoping a strengthening dollar will drive a flurry of activity in the coming months as buyers snap up cheap assets offshore, especially in the United Kingdom and Europe.

As the global economy is hit by serious headwinds, one of the biggest victims has been M&A activity.

According to data from Refinitiv, U.S. mergers and acquisitions activity has dropped 40% year on year in volume with only US$1.2 trillion worth of transactions have been agreed so far this year.

By way of comparison, M&A activity in the U.S. is at its slowest nine months since the start of the coronavirus pandemic in 2020, which preceded a boom in dealmaking.

But it’s not just the U.S. where M&A volume was down, the Asia Pacific region saw deals drop by 30% while M&A activity in Europe fell by 25% over the same period.

Globally, M&A is down 34% from the same period last year to US$2.7 trillion in the nine months to September, reflecting smaller deal flow and decreasing valuations.

But some U.S. dealmakers are hoping a strengthening dollar will drive a flurry of activity in the coming months as buyers snap up cheap assets offshore, especially in the United Kingdom and Europe.

The U.K. and Europe are grappling with a cost of living crisis and a war that is much closer to home, with the business outlook bleak and valuations increasingly attractive.

The sharp drop in the pound in recent weeks has created an opportunity for many U.S. buyers as U.K. stocks are at their cheapest in dollar terms.

Nonetheless, buying activity remains cautious, especially as the U.K. economic outlook remains uncertain, and with the Bank of England having to step in to shore up the pound.

Global dealmakers struck US$642 billion worth of deals in the third quarter, breaking a historic run for M&A where global transactions exceeded US$1 trillion for eight consecutive quarters and another sign that the world will be bracing itself for a recession.

3. Bitcoin ATM Growth Drops for First Time

• According to the data from CoinATMRadar, the total number of Bitcoin ATMs installed over time fell to 37,980 in September from an all-time high of 38,776 ATMs in August, resulting in a drop of -2.05%.

• In September, 796 of such ATMs were pulled off the global network marking negative growth in global net installations for the first time in history.

Data on net changes of cryptocurrency ATM installations confirm that in September, 796 of such ATMs were pulled off the global network marking negative growth in global net installations for the first time in history.

The sudden reduction in the cryptocurrency ATM installations is primarily driven by a slowdown in the United States with a reduction of 825 ATMs but is also a reflection of diminished appetite for digital assets, risk aversion and a soaring dollar.

Regulatory uncertainty has also led to a sharp decline in cryptocurrency ATM installations.

According to the data from CoinATMRadar, the total number of Bitcoin ATMs installed over time fell to 37,980 in September from an all-time high of 38,776 ATMs in August, resulting in a drop of -2.05%.

However, Europe, Canada and a few other jurisdictions cushioned the downfall with new installations locally.

Most recently, Japan decided to reintroduce cryptocurrency ATMs after they were banned in 2014, a move which is being spearheaded by Japanese cryptocurrency exchange Gaia.

Gaia plans to set up 50 Bitcoin ATMs across Tokyo and Osaka by August 2023.

Rolling 60 day data suggests that nearly 14 cryptocurrency ATMs are being installed globally per day, with Genesis Coin representing a 40.3% share of ATMs among other manufacturers.