OOK L T

DAILY TREASURY OUTLOOK
Treasury Research
Selena Ling
+65 6530-4887
LingSSSelena@ocbc.com
Emmanuel Ng
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NgCYEmmanuel@ocbc.com
Wellian Wiranto
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WellianWiranto@ocbc.com
Tommy Xie Dongming
+65 6530-7256
XieD@ocbc.com
Barnabas Gan
+65 6530-1778
BarnabasGan@ocbc.com
OCBC Credit Research
Lee Chok Wai
+65 6722-2215
ChokWaiLee@ocbc.com
OCBC Wing Hang
Iris Pang
+852 2852-5289
IrisPang@ocbcwh.com
Timothy Sham
+852 2852-5791
TimothyPYSham@ocbcwh.com
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Monday, November 10, 2014
Highlights
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Global sentiment appears to be kept in check, following mixed
labour market reports from the US. While the October’s nonfarm
payrolls figure of 214,000 showed that the US economy added more than
200,000 jobs for the ninth straight month, it came below the 235k
expected by market consensus. On the other hand, the unemployment
rate did decrease from 5.9% to 5.8% - the lowest point since 2008.
Elsewhere, over the weekend, China reported export numbers that grew
more than expected, while imports came lower than what market penciled
in, giving fodder to murmurs of potential fake-invoicing again. In his
keynote speech at the APEC Summit in Beijing yesterday, China’s
President Xi Jinping acknowledged that the economy is indeed facing a
number of risks but highlighted that the government has the tools to deal
with them. “Indeed there are risks, but not that scary,” he said. For the
day ahead, market will likely focus on the latest news confirming
that Shanghai-Hong Kong Stock Connect program, after much
delays, will officially now start functioning on November 17th.
Key economic data releases: UK’s overall trade deficit widened to
GBP2.838b in Sep from revised GBP1.768b in Aug. Elsewhere,
Germany’s Sep industrial production +1.4% momsa from -3.1% in Aug
while exports +5.5% momsa and imports +5.4% momsa. Over in Asia,
China’s Oct exports beat expectations at +11.6% yoy while imports fell
short at +4.6% yoy, down from +15.3% and 7.0% in Sep respectively,
widening the trade surplus to $45.41b. Meanwhile, Malaysia’s Sep
exports and imports disappointed expectations at +2.0% yoy and +1.1%
yoy respectively.
A quiet economic data calendar for today: Eurozone Sentix investor
confidence; China Oct CPI, PPI and New Yuan Loans (10/11 – 15/11).
Wall Street ended mixed: Dow +0.11%, S&P500 +0.03% and Nasdaq 0.13%. Walt Disney fell 2.2%. VIX -4.02% to 13.12.
The US Treasury bonds rallied: The 2- and 10-year bond yields were at
0.50% (-5bps) and 2.30% (-9bps) respectively.
China: President Xi Jinping announced over the weekend that China will
commit US$40 billion to set up a special Silk Road infrastructure fund to
support infrastructure investments in Asia. The size of the fund is larger
than previously reported by local media.
China’s October trade data printed in comfortable zone with both exports
and imports increasing by 11.6% and 4.6% respectively. As a result of
slowing imports growth, trade surplus widened again to US$45.4 billion in
October, which again created pressure for RMB to appreciate.
Hong Kong: Overall private residential property price recorded an
increase of 8.3% yoy (1.8% mom) in September, with the increase mainly
driven by a faster increase of smaller sized residential property units.
Meanwhile, China Security Regulation Commission and the Securities
and Futures Commission jointly announced that the launch of ShanghaiHong Kong Stock Connect will begin on 17 November.
10 November 2014
Daily Treasury Outlook
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Indonesia: President Joko Widodo made his maiden trip overseas as the
country’s leader over the weekend by attending the APEC summit in
Beijing. He has also met with China’s President Xi Jinping in which both
leaders reiterated the need for both countries to develop more concrete
ties, with closer cooperation particularly in areas of maritime development
and infrastructure.
Malaysia: Exports for the month of September came below market
expectation, at just 2.0% yoy versus 3.4%, although imports stayed
strong. In particular, robust imports of intermediate goods signal that the
exports should stay fairly supported in the months ahead even if headline
figures suffer due to base effect.
Commodities: Some short-covering may have been observed last week.
The CRB rose 0.56% to 270.66 last Friday, as crude oil and precious
metals climbed as the dollar index fell. Specifically, WTI and Brent rose to
$78.65/bbl (+0.95%) and $83.39/bbl (+0.64%) respectively, while gold
climbed above its $1,150/oz perceived resistance to $1,169.8/oz.
Major Markets

Singapore: The STI fell 0.14% to 3,286.39, dragged by heavyweights
including Jardine Metheson Holdings (-2.01%), Singapore Exchange (1.13%) and Sembcorp (-3.2%). Still, the gains in Olam Int. (+1.44%) and
Thai Beverage (+1.34%) limited the losses. For today, the index may
remain range-bound between 3,280 – 3,300.

China: Despite the steady growth of exports, external demand showed
signs of fatigue with exports growth to G3 economies moderating to 4.9%
in October from 9.3% in September. Exports growth to EU, in particular,
slowed down to 4% from 14.9% while demand from US remained largely
stable. Nevertheless, the fast export growth to Hong Kong again raises
the query about the return of fake-trade amid recent RMB appreciation.
Meanwhile, the slightly weaker than expected imports growth was mainly
due to falling commodity prices. Despite the 17% yoy growth of Iron Ore
imports in terms of volume, Iron Ore imports fell by 24.7% in value terms
due to falling prices.

Malaysia: The KLCI softened 0.43% to close at 1824.19 on Friday.
Another largely rangebound day looks likely following sideways
movement on Wall Street post-NFP.

Commodities: Net-long speculative positions across 19 US commodities
options and futures rose a marginal 9.8k, led by gains in grains and
nymex crude, but dips in gold & silver, and copper limited the gains.
Specifically, gold positions registered the biggest drop since 2013, and fell
to its lowest net-long print in more than 10 months, suggesting prevalence
of downside risk to gold prices.
Bond Market Update

Treasury Research & Strategy
Market Commentary: Last Friday, the SGD swap rates traded 1bp-3bp
2
10 November 2014
Daily Treasury Outlook
higher across the curve with a flattening bias. The SGD corporate bonds
space saw two-way trading activities from institutional accounts. There
were mixed interests in GRCHAR 6% ’17 and PINGIN 4.125% ’19.
Meanwhile, there were buyers of OLAMSP 6% ’22 and sellers of
OLAMSP 4.25% ’19.
Treasury Research & Strategy

New Issues: Sri Rejeki Isman Tbk PT priced a US$70mn tap of SRIRJK
9% ’19c17 at 104.25+accrued. China High Speed Transmission
Equipment Group Co Ltd is planning a new CNH issue with investor
meetings commencing tomorrow.

Rating Changes: Moody’s upgraded the issuer rating of HSBC Bank
China Co Ltd to “A1” from “A2”, with a stable outlook.
3
10 November 2014
Daily Treasury Outlook
Key Financial Indicators
Foreign Exchange
Day Close % Change
DXY
87.642
-0.42%
USD-JPY
114.600
-0.53%
EUR-USD
1.2455
0.65%
AUD-USD
0.8637
0.91%
GBP-USD
1.5869
0.23%
USD-MYR
3.3460
0.28%
USD-CNY
6.1224
0.16%
USD-IDR
12178
0.24%
USD-VND
21295
0.05%
USD-SGD
EUR-SGD
JPY-SGD
GBP-SGD
AUD-SGD
NZD-SGD
CHF-SGD
SGD-MYR
SGD-CNY
Day Close % Change
1.2889
-0.55%
1.6053
0.09%
1.1243
-0.05%
2.0451
-0.34%
1.1131
0.34%
0.9993
0.24%
1.3339
0.17%
2.5849
0.14%
4.7510
0.72%
Equity and Commodity
Index
Value Net change
DJIA
17,573.93
19.50
S&P
2,031.92
0.70
Nasdaq
4,632.53
-5.90
Nikkei 225 16,880.38
87.90
STI
3,286.39
-4.60
KLCI
1,824.19
-7.80
JCI
4,987.42
-46.80
Baltic Dry
1,437.00
1.00
VIX
13.12
-0.60
Interbank Offer Rates (%)
Tenor
EURIBOR
1M
0.0080
2M
0.0450
3M
0.0800
6M
0.1810
9M
0.2560
12M
0.3360
Change
-0.0010
--0.0010
-0.0010
-0.0010
-0.0010
Tenor
O/N
1M
2M
3M
6M
12M
USD Libor
0.0940
0.1573
0.2020
0.2326
0.3267
0.5663
Change
0.0005
0.0018
0.0030
0.0010
-0.0085
Government Bond Yields (%)
Tenor
SGS (chg)
UST (chg)
2Y
0.51 (+0.01) 0.50 (-0.05)
5Y
1.50 (-0.01) 1.58 (-0.09)
10Y
2.32 (-0.01) 2.30 (-0.09)
15Y
2.70 (--)
-20Y
2.83 (--)
-30Y
2.96 (--) 3.03 (-0.08)
Singapore Rates (%)
Tenor
SOR Fixing
1D
0.2775
1M
0.3477
3M
0.2894
6M
0.3701
Change
-0.1889
0.0000
-0.0319
-0.0015
Tenor
1M
3M
6M
12M
SGD SIBOR
0.3815
0.4150
0.5066
0.6332
Change
0.0058
0.0005
-0.0001
0.0002
Financial Spread (bps)
Value
LIBOR-OIS
13.56
EURIBOR-OIS
11.00
TED
21.23
Change
-0.23
-0.10
0.10
Eurozone & Russia Update
2Y Bond Ylds (bpschg) 10Y Bond Ylds (bpschg)
Portugal
Italy
Ireland
Greece*
Spain
Russia*
0.79
0.66
0.06
6.71
0.48
4.22
-10.00
-1.50
-1.50
33.70
0.70
12.30
3.28
2.38
1.68
8.07
2.16
5.08
4.80
-0.60
-4.00
10.50
-0.30
0.00
10Y Bund
Spread %
2.46
1.56
0.87
7.25
1.34
4.26
CDS
168.65
133.53
58.70
452.30
100.88
281.66
CDS
Change
-28.43
9.46
0.23
-5.87
5.48
Equity
Index
2290.61
19095.32
4827.66
910.50
10126.30
1497.11
% Change
-0.73
-0.99
-1.47
-5.38
-1.32
-0.35
* Shows 3-year bond yields rather than 2-year
Com m odities Futures
Energy
WTI (per barrel)
Brent (per barrel)
Heating Oil (per gallon)
Gasoline (per gallon)
Natural Gas (per MMBtu)
Futures
78.65
83.39
2.500
2.14
4.412
% chg
0.95%
0.64%
1.66%
0.24%
0.18%
Soft Com m odities
Coffee (per lb)
Cotton (per lb)
Sugar (per lb)
Orange Juice (per lb)
Cocoa (per mt)
Futures
1.824
0.6396
0.1569
1.2485
2,889
% chg
-0.73%
1.22%
1.36%
-2.84%
0.70%
Base Metals
Copper (per mt)
Nickel (per mt)
Aluminium (per mt)
Futures
6,715.0
15,372
2,063.5
% chg
0.83%
-0.47%
-1.11%
Grains
Wheat (per bushel)
Soybean (per bushel)
Corn (per bushel)
Futures
5.1450
10.403
3.6750
% chg
-1.11%
0.90%
-1.01%
Precious Metals
Gold (per oz)
Silver (per oz)
Futures
1,169.8
15.732
% chg
2.38%
1.96%
Asian Com m odities
Crude Palm Oil (MYR/MT)
Rubber (JPY/KG)
Futures
2,192.0
189.9
% chg
-1.22%
3.21%
Source: Bloomberg, Reuters
(Note that rates are for reference only)
Treasury Research & Strategy
4
10 November 2014
Daily Treasury Outlook
CFTC Commodites Futures and Options
For the week ended: 04 Nov 2014
Current
Previous
Net Chg
Current
Previous
Net Chg
Corn
261,714
219,022
42,692
Gold
61,239
104,521
-43,282
Soybean
45,759
28,533
17,226
Sugar
-2,994
5,798
-8,792
Wheat
-19,579
-29,275
9,696
Copper
-25,993
-21,414
-4,579
Cotton
17,451
11,180
6,271
Lean Hogs
72,124
75,509
-3,385
Nymex Crude
284,840
282,406
2,434
Cocoa
42,908
46,207
-3,299
Natural Gas
-206,365
-207,101
736
Coffee
42,122
45,272
-3,150
22,811
22,224
587
Heating Oil
-29,623
-27,777
-1,846
145
-98
243
Live Cattle
123,537
125,039
-1,502
21,635
21,509
126
RBOB Gasoline
56,832
56,769
63
Palladium
Silver
Platinum
Source: CFTC
Key Economic Indicators
Date
11/07/2014 12:01
11/07/2014 12:01
11/07/2014 15:00
11/07/2014 15:00
11/07/2014 15:00
11/07/2014 15:00
11/07/2014 15:30
11/07/2014 15:30
11/07/2014 15:45
11/07/2014 15:45
11/07/2014 15:45
11/07/2014 15:45
11/07/2014 15:45
11/07/2014 16:00
11/07/2014 16:00
11/07/2014 16:52
11/07/2014 17:00
11/07/2014 17:30
11/07/2014 21:30
11/07/2014 21:30
11/07/2014 21:30
11/07/2014 21:30
11/07/2014 21:30
11/08/2014
11/08/2014
11/08/2014
11/10/2014 08:30
11/10/2014 08:30
11/10/2014 09:30
11/10/2014 09:30
11/10/2014 17:00
11/10/2014 17:00
11/10/2014 21:15
11/10/2014 11/17
11/10/2014 11/15
11/10/2014 11/15
11/06/2014 11/13
MA
MA
GE
GE
GE
GE
FR
TH
FR
FR
FR
FR
FR
TA
TA
HK
ID
UK
US
CA
CA
US
US
CH
CH
CH
Event
Exports YoY
Trade Balance MYR
Industrial Production SA MoM
Industrial Production WDA YoY
Trade Balance
Exports SA MoM
Bank of France Bus. Sentiment
Foreign Reserves
Industrial Production MoM
Industrial Production YoY
Manufacturing Production MoM
Manufacturing Production YoY
Trade Balance
Exports YoY
Imports YoY
Foreign Reserves
Foreign Reserves
Trade Balance
Change in Nonfarm Payrolls
Unemployment Rate
Net Change in Employment
Change in Manufact. Payrolls
Unemployment Rate
Trade Balance
Exports YoY
Imports YoY
Sep
Sep
Sep
Sep
Sep
Sep
Oct
Oct-31
Sep
Sep
Sep
Sep
Sep
Oct
Oct
Oct
Oct
Sep
Oct
Oct
Oct
Oct
Oct
Oct
Oct
Oct
AU
AU
CH
CH
IT
IT
CA
IN
CH
CH
VN
Home Loans MoM
Owner-Occupier Loan Value MoM
PPI YoY
CPI YoY
Industrial Production MoM
Industrial Production WDA YoY
Housing Starts
Exports YoY
New Yuan Loans
Money Supply M2 YoY
Domestic Vehicle Sales YoY
Sep
Sep
Oct
Oct
Sep
Sep
Oct
Oct
Oct
Oct
Oct
Survey
3.40%
5.30B
2.00%
-0.60%
19.0B
2.70%
96
--0.20%
-0.40%
0.00%
-0.30%
-5200M
4.80%
4.80%
---£2300
235K
6.90%
-5.0K
10K
5.90%
$42.00B
10.60%
5.00%
Actual
2.00%
9.33B
1.40%
-0.10%
21.9B
5.50%
96
$160.6B
0.00%
-0.30%
0.60%
0.20%
-4715M
0.70%
-1.40%
$325.4B
$111.97B
-£2838
214K
6.50%
43.1K
15K
5.80%
$45.41B
11.60%
4.60%
Prior
1.70%
3.86B
-4.00%
-2.80%
14.1B
-5.80%
96
$161.6B
0.00%
-0.30%
-0.20%
-0.60%
-5783M
4.70%
0.20%
$325.8B
$111.20B
-£1917
248K
6.80%
74.1K
4K
5.90%
$30.94B
15.30%
7.00%
Revised
---3.10%
-1.90%
14.0B
----0.20%
--0.50%
--5025M
-----£1768
256K
--9K
-$30.96B
---
-0.40%
--2.00%
1.60%
-0.20%
-0.70%
200.0K
-626.4B
12.90%
--
-0.70%
1.40%
----------
-0.90%
-2.00%
-1.80%
1.60%
0.30%
-0.70%
197.3K
2.70%
857.2B
12.90%
52.80%
--1.90%
----------
Source: Bloomberg
Treasury Research & Strategy
5
10 November 2014
Daily Treasury Outlook
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Treasury Research & Strategy
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