Daily FX & Market Commentary

Transcription

Please note and carefully read the
Important Disclosure on the last page
Dec 3, 2014
Published from Tuesday to Friday
Market Recap
Table: Daily Market Movement (Dec 2, 2014)
• U.S. stocks gained: S&P 500 gained 0.6%
as two top Federal Reserve officials stressed
the positive impact on the U.S. economy from
the drop in energy prices.
• Oil prices fell : Brent and WTI Crude
Futures resumed its fall, down -2.8% and 3.1%
to
US$70.54
and
US$66.88
respectively.
• China stocks surged: Hang Seng China
Enterprise Index and CSI 300 rose 2.9% and
3.7% respectively, led by financials. Hong
Kong-listed Chinese brokerage stocks
including China Galaxy Securities, Haitong
Securities and CITIC Securities were up 79% respectively.
Equity Market Indices
U.S.
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Europe
Stoxx Europe 600 Index
DAX Index
Close Change
2,066.55
17,879.55
4,755.81
+13.1
+102.8
+28.5
347.37
9,934.08
+1.7
-29.4
Japan
TOPIX Index
Nikkei 225 Stock Average
1,427.85
17,663.22
+6.2
+73.1
China / Hong Kong
Hang Seng Index
Hang Seng China Enterprises
23,654.30
11,125.79
+286.8
+307.6
2,763.55
+83.4
Shanghai SE Composite
% Commodity Futures
Energy & Metals
+0.6% WTI Crude Oil (USD/bbl)
+0.6% Brent Crude (USD/bbl)
+0.6% Natural Gas (USD/MMBtu)
COMEX Gold (USD/oz)
+0.5% LME Copper (USD/MT)
-0.3% Bond Yields & CNY
U.S. Treasuries - Yields
+0.4% 3-Month - Yield (%)
+0.4% 5-Year - Yield (%)
10-Year - Yield (%)
+1.2% 30-Year - Yield (%)
+2.8% USD/CNY
+3.1% China Renminbi Spot
Close
66.88
70.54
3.87
1,199.4
%
-3.1%
-2.8%
-3.3%
-1.5%
6,449.0
0.0%
Close Change
0.01
0.00
1.59
+0.06
2.29
+0.06
3.01
+0.05
Close
6.15
%
0.0%
Data Source: Bloomberg L.P.
Hot News: EUR may fall further amid hawkish comment by
the Fed members
Chart: EUR/USD – Daily Chart
1.2231 (200-month MA)
1.2043 (2012 low)
Source: Bloomberg L.P., as of Dec 3, 2014
USD rose to 5-year high yesterday:
• Fed Vice Chair Stanley Fischer said low oil prices
would be “very good” for U.S. growth.
• He also said Fed nearing end of ‘considerable time’
vow to hold rates down.
• USD Index rose 0.8% to close at 88.63, while
EUR/USD plunged 0.7% to close at 1.2383.
Citi analysts’ view:
• Both Fed Vice Chair Fischer and FRBNY President
Dudley were relatively optimistic on the U.S.
economy and went out of their way to stress upside
benefits to U.S. economy of weaker oil prices.
• All of this is extremely positive for USD, given
that fed funds has priced in an extremely flat policy
hike and the USD looks extremely sensitive to
interest rate differentials in the current environment.
• For EUR, the current macro environment is
similar to 1998-1999, with European inflation was
making lower lows and the ECB cut rates in April
1999, while the Fed instead began a tightening
cycle in June 1999.
• In October 1998 after the EUR had rallied 16.5%,
the pair stopped going up (this is exactly what
happened in May of this year) and started a 2 year
of period of USD outperformance against the EUR.
• On technical analysis (Chart), 1) RSI begins to
fall; 2) Downtrend channel; 3) Restrain by 55MA.
• Technical signals reflect that EUR/USD may
remain bearish and may fall toward 1.20431.2231, with resistance at around 1.2607.
© 2014 Citibank
Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited
1
FX & Commodity Technical Corner
YESTERDAY PERFORMANCE
FX TREND
TECHNICAL
CCY
USD
EUR/USD
USD/JPY
GBP/USD
USD/CAD
AUD/USD
NZD/USD
USD/CHF
USD/SGD
GOLD
Close Price
Day High
Day Low
87.95
1.2383
119.21
1.5637
1.1407
0.8445
0.7806
0.9721
1.3117
1198.30
88.45
1.2476
119.29
1.5743
1.1424
0.8543
0.7891
0.9730
1.3118
1213.59
87.78
1.2377
118.22
1.5632
1.1319
0.8433
0.7785
0.9642
1.3043
1192.05
Short Term
Comment
Bullish
Bearish
Bullish
Neutral
Bullish
Neutral
Neutral
Neutral
Neutral
Neutral
Support
Resistance
84.75
1.2231
115.84
1.5586
1.1221
0.8317
0.7661
0.9156
1.2868
$1,132
89.00
1.2607
120.00
1.5968
1.1467
0.8608
0.8052
0.9839
1.3138
$1,250
Citi Foreign Exchange
Forecast:
0-3
Months
90.01
1.21
118.00
1.53
1.13
0.86
0.77
1.00
1.30
1200
6-12
Months
97.94
1.10
125.00
1.41
1.18
0.80
0.72
1.10
1.33
1240
FX Rate Source: Bloomberg L.P. (cut off time is NY Time 5:00pm)
•
•
•
•
USD rose: Fed Vice Chair Stanley Fischer said low oil prices would be “very good” for U.S. growth.
JPY fell: Yield spread between U.S. and Japan government bonds widened yesterday.
EUR plunged: Eurozone PPI growth (MoM) fell from +0.2% to -0.4% in Oct, trailed market estimates.
AUD weakened: The RBA kept rates unchanged yesterday but still talked down the currency.
Daily FX Focus
AUD/USD may fall further toward 0.8317:
0.8608 (20MA)
0.8317 (2010 Jul low)
0.8067 (2010 May low)
Source: Bloomberg L.P., data as of Dec 3, 2014
Technical Analysis:
• 1) RSI: falling; 2)Lower lows after firm breach of Jan’s low at 0.8660
• Technical signals suggests AUD/USD may fall further toward 0.8317 and
then 0.8067, with short-term resistance at 20MA of 0.8608.
AUD Outlook:
• The RBA announced rate decision to
keep the interest rate unchanged at
2.50% as expected.
• The monetary statement said the
exchange rate is still high given the
recent decline in commodity prices.
• It said the lower exchange rate may
be needed to achieve balanced
growth in the economy.
• Although there are some changes in
the statement, we believe this does
not represent a change in monetary
policy as it only reiterated the
previous comments from the RBA.
• We believe the RBA may keep its
current interest rate till Q4 2015.
NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
© 2014 Citibank
2
AUD/CAD may trade inside 0.9593-0.9937:
AUD/CAD Outlook:
• CAD may underperform due to the
selloff in crude oil price after the
OPEC decided to keep oil supply
ceiling unchanged. We believe the oil
price may remain under pressure due
to oversupply.
• AUD may outperform as the start of
rate cut cycle in China may boost risk
appetite and the further easing policy
in the ECB and BOJ may raise carry
trade demand for AUD.
0.9937 (Jul low)
0.9593 (Jan 2014 low)
Source: Bloomberg L.P., data as of Dec 3, 2014
Technical Analysis:
• 1) RSI: turning up from the oversold condition; 2) Rebound after failure to close below support at 0.9593.
• Technical signals show AUD/CAD may rebound after holding above 0.9593 and price may trade inside 0.95930.9937 range.
Investment Market Update
Surge in stock turnover give a boost to Chinese brokers
Billions
Chart: Combined daily turnover of Shanghai and
Shenzhen stock exchanges (billion yuan)
800
700
600
500
400
300
200
100
10/21/14
10/28/14
11/4/14
11/11/14
11/18/14
11/25/14
12/2/14
Source: Bloomberg, as of Dec 2, 2014
Brokers rose yesterday as stock turnover jumped:
• The CSI 300 Index rallied 3.7% to a three-year high, as
a surge in trading boosted the outlook for brokerage
profits and investors bet the People’s Bank of China
will ease monetary policy.
• Haitong Securities Co. surged 9.2% while Citic
Securities Co. climbed 7.3%.
Citi analysts’ view:
• Citi analysts anticipate brokerage and investment
banking businesses to benefit from an A-share
market rebound.
• A-share average daily turnover has surged
significantly since 3Q 2014 (chart) and the
momentum is likely to continue into 2015 with
the recently launched SH-HK Stock Connect and
interest rate cut.
• Flow-based quasi lending business (margin
financing, stock repo, buy back etc.) is also likely to
grow rapidly following low penetration and down
trending borrowing costs.
• Fixed-income, currencies and commodities
(FICC), asset management and asset-backed
securities (ABS) could further be developed
amidst China’s financial reform.
• For example, local government issuing debts may
benefit broker's debt underwriting business and
enlarge FICC market.
• Within China equities, Citi analysts are
overweight on Brokers.
NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
© 2014 Citibank
3
Important Economic Data (Dec 1, 2014 – Dec 5, 2014)
Time
Importance
Event
Period Actual
Terms of Trade Index QoQ
3Q
Survey
Prior
-4.40%
-4.60%
0.10%
Monday
12/01/2014 05:45
NZ
!!
12/01/2014 09:00
CH
!!
Manufacturing PMI
Nov
50.3
50.5
50.8
12/01/2014 09:45
CH
!!
HSBC China Manufacturing PMI
Nov
50.0
50
50
12/01/2014 17:00
EC
!!
Markit Manufacturing PMI
Nov
50.1
50.4
50.4
12/01/2014 17:30
UK
!!
Markit UK PMI Manufacturing SA
Nov
53.5
53
53.3
12/01/2014 23:00
US
!
ISM Manufacturing
Nov
58.7
58.0
59
12/02/2014 11:30
AU
!!!
RBA Cash Rate Target
Dec
2.50%
2.50%
2.50%
12/03/2014 08:30
AU
!!!
GDP YoY
3Q
2.70%
3.00%
2.70%
12/03/2014 09:00
CH
!!
Non-manufacturing PMI
Nov
53.9
--
53.8
12/03/2014 09:45
CH
!!
HSBC China Services PMI
Nov
53.0
--
52.9
12/03/2014 17:00
EC
!!
Markit Eurozone Services PMI
Nov
--
51.3
51.3
12/03/2014 17:30
UK
!!
Markit/CIPS UK Services PMI
Nov
--
56.5
56.2
12/03/2014 18:00
EC
!
Retail Sales YoY
Oct
--
--
0.60%
12/03/2014 18:00
EC
!!!
GDP SA YoY
3Q
--
0.80%
0.80%
Tuesday
Wednesday
12/03/2014 21:15
US
!!
ADP Employment Change
Nov
--
222K
230K
12/03/2014 23:00
CA
!!!
Bank of Canada Rate Decision
Dec
--
1.00%
1.00%
12/04/2014 08:30
AU
!
Trade Balance
Oct
--
-1750M
-2261M
12/04/2014 20:00
UK
!!
Bank of England Bank Rate
Dec
--
0.50%
0.50%
12/04/2014 20:45
EC
!!!
ECB Main Refinancing Rate
Dec
12/04/2014 21:30
US
!
Initial Jobless Claims
12/05/2014 21:30
CA
!!
Unemployment Rate
12/05/2014 21:30
US
!!!
Change in Nonfarm Payrolls
12/05/2014 21:30
US
!!!
Unemployment Rate
Nov
Thursday
--
0.05%
0.05%
--
--
313K
Nov
--
6.60%
6.50%
Nov
--
225K
214K
--
5.80%
5.80%
Friday
For any enquiries, please call (852) 2860-0333.
Source: Source: Bloomberg L.P.
(K = Thousand, M = Million, B = Billion)
This document is based on information provided by Citigroup Investment Research, Citigroup Global Markets, Citigroup Global Wealth Management and Citigroup Alternative Investments. It is
provided for your information only. It is not intended as an offer or solicitation for the purchase or sale of any security. Information in this document has been prepared without taking account of the
objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the information, consider its appropriateness, having regard to their objectives, financial
situation and needs. Any decision to purchase securities mentioned herein should be made based on a review of your particular circumstances with your financial adviser. Investments referred to in
this document are not recommendations of Citibank (Hong Kong) Limited (“Citibank”) or its affiliates. Although information has been obtained from and is based upon sources that Citibank believes to
be reliable, Citi analysts do not guarantee its accuracy and it may be incomplete and condensed. All opinions, projections and estimates constitute the judgment of the author as of the date of
publication and are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Past performance is no guarantee of future results. The
document is not to be construed as a solicitation or recommendation of investment advice. Subject to the nature and contents of the document, the investments described herein are subject to
fluctuations in price and/or value and investors may get back less than originally invested. Certain high-volatility investments can be subject to sudden and large falls in value that could equal the
amount invested. Certain investments contained in the document may have tax implications for private customers whereby levels and basis of taxation may be subject to change. Citibank does not
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joint venture between Citi’s foreign exchange, global macro and technical strategy groups and our developed and emerging markets economists. Under normal circumstances, we expect to present
Forecasts on a monthly schedule although we may offer intra month updates if circumstances dictate. Technical Trend: All views, opinions and estimates derived from CitiFX Technicals (i) may
change without notice and (ii) may differ from those views;, opinions and estimates held or expressed by Citi or other Citi personnel, including Citi Foreign Exchange: Forecast. Should CitiFX
Technicals not cover any major currency pairs, the indication of short-term technical "bullish", "bearish", or "neutral" trends will be based on the result of analysis with various widely known short-term
technical analysis tools, namely RSI, MACD, fibonacci, stochastics, bollinger bands, and simple moving averages.
4

Daily FX & Market Commentary

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