Daily FX & Market Commentary

Transcription

Please note and carefully read the
Important Disclosure on the last page
Dec 4, 2014
Published from Tuesday to Friday
Market Recap
• U.S. stocks rose: The S&P 500 rose 0.4%
after a private payrolls report showed U.S.
firms added 208,000 workers in Nov,
indicating steady progress in the labor
market.
• Brazil raised interest rate: Brazil’s central
bank raise the benchmark Selic by half a
point to 11.75% as the government pledges
to slow inflation to its 4.5% target.
• China ‘s stocks advanced: The CSI 300
Index added 1.5%, led by commodity
producers and consumer companies.
Table: Daily Market Movement (Dec 3, 2014)
Equity Market Indices
U.S.
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Europe
Stoxx Europe 600 Index
DAX Index
Japan
TOPIX Index
Nikkei 225 Stock Average
China / Hong Kong
Hang Seng Index
Hang Seng China Enterprises
Shanghai SE Composite
Close Change
2,074.33
17,912.62
4,774.47
+7.8
+33.1
+18.7
349.34
9,971.79
+2.0
+37.7
1,429.75
17,720.43
+1.9
+57.2
23,428.62
11,060.21
-225.7
-65.6
2,779.53
+16.0
% Commodity Futures
Energy & Metals
+0.4% WTI Crude Oil (USD/bbl)
+0.2% Brent Crude (USD/bbl)
+0.4% Natural Gas (USD/MMBtu)
COMEX Gold (USD/oz)
+0.6% LME Copper (USD/MT)
+0.4% Bond Yields & CNY
U.S. Treasuries - Yields
+0.1% 3-Month - Yield (%)
+0.3% 5-Year - Yield (%)
10-Year - Yield (%)
-1.0% 30-Year - Yield (%)
-0.6% USD/CNY
+0.6% China Renminbi Spot
Close
67.38
69.92
3.81
1,208.7
%
+0.7%
-0.9%
-1.8%
+0.8%
6,414.0
0.0%
Close Change
-0.01
0.01
+0.01
1.60
-0.01
2.28
-0.03
2.98
Close
%
6.15 +0.0%
Data Source: Bloomberg L.P.
Hot News: Compelling value is being offered by Asian
equities
Chart: Price-to-Book Value Spreads: 3 most expensive
and 3 cheapest markets
Source: MSCI and Citi Research, as of Nov 28, 2014
Asia ex Japan had underperformed year-to-date
• A shares, as represented by CSI 300 Index, continues
its strength yesterday, rising 1.5%, which was the 9
consecutive days of gains. The index is up more than
27% year-to-date.
• In sharp contrast is the performance of Asia (ex Japan),
which has underperformed global equities. MSCI Asia
(ex Japan) year-to-date gained 2.83% versus MSCI AC
World’s 4% year-to-date gains.
Citi analysts’ view:
• Currently Asia is offering compelling value and the
outlook for positive returns is decent for investors
with longer term time horizons.
• Over the last 39 years, Asia ex Japan Price-toEarnings are higher than the current level 87% of
the time, Price-to-Book 73% of the time.
• This year, within Asia, investors derive comfort from
outcomes of election in India and Indonesia and
from ASEAN being more domestic demand focus
and less export dependent than North Asia.
• This is reflected by a wide spread of valuations
within Asia. The ratio of the top three most
expensive (India, Indonesia and Philippines) vs the
bottom three (Korea, Singapore and Hong Kong) is
at elevated levels as it has only been higher during
the Asian crisis, the TMT bubble and the Global
financial crisis.
• A stronger US$ has historically signaled a stronger
growth profile for the US economy which has been
a positive for export-oriented markets in Asia.
• Within Asia, Citi analysts’ preferred markets are
China, Taiwan and Singapore.
© 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
88.96
1.2311
119.79
1.5686
1.1365
0.8405
0.7759
0.9775
1.3124
1209.42
89.01
1.2391
119.87
1.5719
1.1418
0.8467
0.7808
0.9783
1.3136
1215.22
88.58
1.2301
119.13
1.5620
1.1347
0.8389
0.7737
0.9715
1.3088
1194.66
Short Term
Comment
Bullish
Bearish
Bullish
Neutral
Bullish
Neutral
Neutral
Neutral
Neutral
Neutral
Support
Resistance
84.75
1.2231
117.24
1.5586
1.1221
0.8317
0.7661
0.9156
1.2868
$1,132
89.62
1.2607
121.40
1.5968
1.1467
0.8598
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 Beige Book focused on strong growth prospects, rather than the soft inflation outlook.
JPY plunged: A Nikkei poll showed that the LDP-led coalition expanding its majority in this month's elections.
GBP advanced: U.K. Service PMI rose from 56.2 to 58.6 in Nov, topped market expectations of 56.5.
AUD weakened: Australia GDP only grew 0.3% in Q3, trailed market estimates of 0.7% increase.
Daily FX Focus
AUD/USD may range trade between 0.8317-0.8598:
0.8598 (20MA)
0.8317 (2010 Jul low)
0.8067 (2010 May low)
Source: Bloomberg L.P., data as of Dec 4, 2014
AUD Outlook:
• The gap between the market’s expected 0.7%
GDP growth rate versus the printed 0.3% was
the biggest downside surprise since Q4 2008.
• The fall in private non-dwelling construction was
larger than we forecast (-6.7% vs -1.8%), and
household consumption was a little weaker than
expected (0.5% vs 0.6%).
• Interpolating the June and December RBA 2014
GDP forecasts provides an implied RBA
forecast of 2.75% (YoY) for Q3 growth in yearended terms, in-line with the published result.
• The two monthly readings on the unemployment
rate before Feb’s RBA meeting may be
important in helping to gauge whether the
economy is losing momentum and therefore
whether more monetary policy easing is needed.
Technical Analysis:
• 1) RSI: Oversold; 2) Getting closer to the interim support at 0.8317
• Technical signals suggests that AUD/USD may remain range trading between 0.8317-0.8598 in the short term.
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/NZD may range trade inside 1.0784-1.0964:
Recap:
• AUD/NZD staged a recovery as the
whole milk powder prices index
slumped by 7.1% in Fonterra auction.
1.0964 (fibo 0.50)
1.0784 (fibo 0.764)
Technical Analysis:
• 1) RSI: turning up from the oversold; 2) Recover after brief breach of
1.0784 (fibo 0.764)
• Technical signals suggests AUD/NZD may trade inside 1.0784-1.0964,
with mild upside bias in short term.
AUD/NZD Outlook:
• AUD/NZD may be supported on
AUD’s strength as the easing
measures from the ECB and the BoJ
may raise the carry trade demand for
AUD.
• Despite the weakness in Australian
GDP, the RBA will likely wait for the
jobs data to determine whether rate
cut is necessary.
• However, AUD/NZD’s upside may be
limited as the decline in crude oil price
may raise concerns of the export
income and lower inflation pressure.
GBP/USD may trade inside 1.5590-1.5968:
1.5968 (fibo 0.236)
1.5590 (Nov low)
Technical Analysis:
• 1) RSI: rising; 2)Recover after brief dip below Nov low at 1.5590
• Technical signals suggests GBP/USD may trade inside the range of
1.5590-1.5968 with mild upside bias.
Data to be released in next 24 hours:
• BoE rate decision (forecast: 0.50%, previous: 0.50%)
Recap:
• GBP rose yesterday as U.K. service
PMI came in at 58.6, much better than
the 56.2 in Oct, beating the forecast.
GBP Outlook:
• The U.K. released the Autumn
Statement yesterday, saying this
year’s deficit forecast has been lifted
by roughly 5bn pounds.
• However, the government believed
the deficit overrun is temporary, given
lower gilt yields and spontaneous
rebound in the tax/GDP ratio.
• The government expect 2015 GDP
gorwth may be 2.4%.
• We expect 2015 GDP growth may
reach 3.0%, with strong consumer
spending and business investment,
but fiscal deficit remains uncertain.
Further government spending cuts
may not be achieveable if the 2015
election creates a hung parliament.
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
51.1
51.3
51.3
12/03/2014 17:30
UK
!!
Markit/CIPS UK Services PMI
Nov
58.6
56.5
56.2
12/03/2014 18:00
EC
!
Retail Sales YoY
Oct
1.40%
1.60%
0.50%
12/03/2014 21:15
US
!!
ADP Employment Change
Nov
208K
222K
233K
12/03/2014 23:00
CA
!!!
Bank of Canada Rate Decision
Dec
1.00%
1.00%
1.00%
-2261M
Tuesday
Wednesday
Thursday
12/04/2014 08:30
AU
!
Trade Balance
Oct
--
-1750M
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
--
0.05%
0.05%
12/04/2014 21:30
US
!
Initial Jobless Claims
--
--
313K
Friday
12/03/2014 18:00
EC
!!!
GDP SA YoY
3Q
0.80%
0.80%
12/05/2014 21:30
CA
!!
Unemployment Rate
Nov
--
6.60%
6.50%
12/05/2014 21:30
US
!!!
Change in Nonfarm Payrolls
Nov
--
225K
214K
12/05/2014 21:30
US
!!!
Unemployment Rate
Nov
--
5.80%
5.80%
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
provide tax advice and investors should seek advice from a tax adviser. Investment products: (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations
of any insured depository institution (including Citibank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested. Citi Foreign Exchange: Forecasts are a
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

Transcription

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