Daily FX & Market Commentary

Transcription

Please note and carefully read the
Important Disclosure on the last page
Mar 6, 2015
Published from Tuesday to Friday
Market Recap
Table: Daily Market Movement (Mar 5, 2015)
• Europe stocks rose: Stoxx 600 rose 0.8%
as ECB president said €60bn-a-month
bond-buying plan would begin next Monday
and continue until at least Sep 2016 while
also stressed seeing positive effects from
the latest easing moves.
• US stocks rose: S&P 500 rose 0.1% in
light trading as markets await the release of
the monthly report on US payroll on Friday.
• HK/China stocks fell: Hang Seng Index
fell 1.1% and CSI 300 Index fell 1%
respectively as China premier Li Keqiang
said to target China growth at around 7%
this year at the opening of China’s annual
parliamentary meeting in Beijing.
Equity Market Indices
U.S.
Close Change
% Commodity Futures
Energy & Metals
Close
%
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Europe
2,101.04
18,135.72
4,982.81
+2.5
+38.8
+15.7
+0.1% WTI Crude Oil (USD/bbl)
+0.2% Brent Crude (USD/bbl)
+0.3% Natural Gas (USD/MMBtu)
COMEX Gold (USD/oz)
50.76
60.70
2.84
1,196.2
-1.5%
+0.2%
+2.6%
-0.4%
Stoxx Europe 600 Index
DAX Index
Japan
TOPIX Index
Nikkei 225 Stock Average
China / Hong Kong
Hang Seng Index
Hang Seng China Enterprises
393.78
11,504.01
+3.2
+113.6
5,840.0
0.0%
1,523.72
18,751.84
+6.7
+48.2
24,193.04
11,597.77
-272.3
-140.9
+0.8% LME Copper (USD/MT)
+1.0% Bond Yields & CNY
U.S. Treasuries - Yields
+0.4% 3-Month - Yield (%)
+0.3% 5-Year - Yield (%)
10-Year - Yield (%)
-1.1% 30-Year - Yield (%)
-1.2% USD/CNY
3,248.48
-31.1
Shanghai SE Composite
-0.9% China Renminbi Spot
Close Change
0.01
0.00
1.57
-0.01
2.12
0.00
2.73
+0.01
Close
%
6.27
-0.1%
Data Source: Bloomberg L.P.
Hot News: China lowered its 2015 GDP growth target to
around 7%
Chart: Key targets in the government’s work plan
2015
2015 Target
2014 Target
2014 Actual
Citi 2015 Forecast
GDP (YoY%)
7
7.5
7.4
6.9
CPI (YoY%)
3
3.5
2
1.5
M2 (YoY%)
12
13
12.2
11.9
Fiscal balance as % GDP
-2.3
-2.1
-1.8
-2.5
Railway investment
(bn RMB)
800+
800
808.8
810
Source: NPC, NDRC,CEIC and Citi Research, as of Mar 5, 2015
Premier Li Keqiang delivered the government’s
work plan for 2015
• Premier Li Keqiang delivered the government’s work
plan for 2015 yesterday during the annual gathering of
the National People’s Congress.
• The government had lowered its GDP growth target to
around 7% this year but would aim for a better result
(chart).
Citi analysts’ view:
• Citi analysts expect 6.9% GDP growth this year
due to concerns over the property sector
slowdown. The CPI target is lowered from 3.5% to
3%, suggesting the government’s expectation of
lowflation this year.
• Fiscal deficits are lifted to 2.3% GDP this year,
up from actual 1.8% last year. This may imply
fiscal tightening if local government debts are
restructured. But Mr. Li also opened the doors for
the issuance of special bonds by local
governments to possibly roll over debts and fund
existing projects.
• Broad areas of reform were discussed in Mr. Li’s
speech, including reducing the government’s
approval power, price reform, tax reform, entry of
more privately-owned banks, capital market reform,
healthcare reform, hukou and SOE reform.
• On property, a clearer supportive message than
last year – not mentioning any tightening, instead
to “support the own-use and upgrade housing
demand, ensure stable and healthy development
in the property market” in 2015 (vs 2014’s “control
and manage the property market on city-specific
basis”; “curb speculation/ investment demand”).
© 2015 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
95.97
1.1030
120.13
1.5240
1.2486
0.7782
0.7482
0.9739
1.3710
1198.34
96.06
1.1114
120.40
1.5270
1.2518
0.7841
0.7597
0.9750
1.3717
1209.61
95.32
1.0988
119.63
1.5215
1.2407
0.7754
0.7454
0.9629
1.3666
1196.64
Short Term
Comment
Bullish
Bearish
Neutral
Neutral
Neutral
Neutral
Neutral
Bullish
Neutral
Bullish
Support
Resistance
90.00
1.0765
115.50
1.4952
1.2285
0.7626
0.7177
0.9374
1.3370
$1,167
95.86
1.1534
121.85
1.5552
1.2799
0.7971
0.7613
1.0000
1.3792
$1,255
Citi Foreign Exchange
Forecast:
0-3
Months
95.42
1.12
118.00
1.53
1.25
0.75
0.74
0.98
1.37
1270
6-12
Months
106.94
0.99
130.00
1.32
1.30
0.70
0.67
1.11
1.40
1240
FX Rate Source: Bloomberg L.P. (cut off time is NY Time 5:00pm)
• GBP dropped briefly: The BoE kept its rate at 0.5% unchanged as expected.
• NZD tumbled: Chinese government lowered its GDP growth to 7% this year, down from 2014 target at 7.5%.
• EUR fell sharply: ECB's Draghi said the ECB would buy negative yield debt down to the deposit rate (-0.2%)
and said there is "no duration target for the program.".
Daily FX Focus
EUR/USD may drop toward 1.0765:
1.0765 (Sep
2003 low)
Source: Bloomberg L.P., data as of Mar 6, 2015
Technical Analysis:
• Since the peak in May last year we have turned sharply
lower as we did after the peak in October 1998, which
may send EUR/USD toward parity in long term.
• In the short term, EUR/USD has penetrated Jan’s low at
1.1098 and the pair may drop further toward 1.0765.
EUR Outlook:
• The ECB confirmed to start EUR60 billion per
month of QE in 9 Mar and end until Sep 2016.
• The ECB said a further improvement in the outlook
for economic growth is seen.
• The mid-points for real GDP growth in 2015-16
were revised up to 1.5% and to 1.9%, respectively.
The 2017 mid-point stands at 2.1%.
• For inflation, the staff cut the 2015 mid-point by
0.7pp to 0.0%, but raised the 2016 mid-point to
1.5%. In 2017, they expect a further uptick to 1.8%.
• Most of these numbers are well-above consensus
but we continue to see noticeable risks that core
inflation remains more subdued, partly based on
the persistence of sizeable economic slack.
• The ECB is unlikely to taper before Sep-16. 1) We
doubt that a majority of GC members would
support it. 2) The inflation gap remains sizeable. 3)
market-based expectations of long-dated inflation
have not recovered much.
• If the ECB were to maintain these 2017 forecasts in
coming quarters, then the prospects of QE2
(beyond Sep-16) would recede.
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.
© 2015 Citibank
2
NZD/USD may trade inside 0.7177-0.7609:
0.7609 (Dec 2014 low)
0.7177 (Feb low)
NZD Outlook:
• NZD fell sharply on active cross selling of
NZD after China Premier Li Keqiang lowered
its GDP growth target to 7% this year.
• He acknowledged the economic downward
pressure is still mounting, and lowered the
CPI target from 3.5% previously to 3%
• The 2015 work plan in China showed
monetary and fiscal policies tighter than
expected but could be data dependent.
• As China is one of the biggest trade partner
in NZ, the slowdown in Chinese economy
may lower the export income in NZ. This
may be NZD-negative.
• Investors are now waiting for RBNZ rate
decision next Thursday.
Technical Analysis:
• 1) RSI: turning down from overbought ; 2) Price is capped below downtrend line, 55MA & resistance at 0.7609.
• We expect NZD/USD may trade inside 0.7177-0.7609 range first.
GBP/NZD may trade inside 2.0090-2.0937:
2.0937 (Feb top)
2.0090 (fibo 0.50)
GBP/NZD Outlook:
• Although U.K. services PMI fell to 56.7 in
Feb from 57.2 in Jan, with gains in the
manufacturing and construction PMIs (54.1
& 60.1, up from 53.1 & 59.1), the overall
weighted average PMI edged up to 56.6 in
Feb from 56.1 in Jan and is the highest for
three months.
• The readings suggest the U.K. economy
remains solid amid falling unemployment
rate, rising wage level and low oil prices.
This may support GBP.
• NZD may underperform as Citi analysts
expect the RBNZ to jawbone the currency
and threaten to intervene if this does not
work. This may be NZD-negative.
Technical Analysis:
• 1) RSI: turning up ; 2) The pair rebounded strongly after holding above fibo 0.50 at 2.0090
• We expect GBP/NZD may trade inside 2.0090-2.0937 with upside bias.
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.
© 2015 Citibank
3
Important Economic Data (Mar 2, 2015 – Mar 6, 2015)
Time
Importance
Event
Period Actual
Survey
Prior
Monday
03/02/2015 17:00
EC
!!
Markit Eurozone Manufacturing PMI
Feb
51.0
51.1
51.1
03/02/2015 17:30
UK
!!
Markit UK PMI Manufacturing SA
Feb
54.1
53.4
53.1
03/02/2015 18:00
EC
!
Unemployment Rate
Jan
11.20%
11.40%
11.30%
03/02/2015 18:00
EC
!!!
CPI Estimate YoY
Feb
-0.30%
-0.40%
-0.60%
-$13.9B -$12.5B
-$9.6B
03/02/2015 21:30
CA
!
Current Account Balance
4Q
03/02/2015 21:30
US
!!
Personal Income
Jan
0.30%
0.40%
0.30%
03/02/2015 21:30
US
!!
Personal Spending
Jan
-0.20%
-0.10%
-0.30%
03/02/2015 23:00
US
!!
ISM Manufacturing
Feb
52.9
53.0
53.5
Tuesday
03/03/2015 11:30
AU
!!!
RBA Cash Rate Target
Mar
2.25%
2.00%
2.25%
03/03/2015 21:30
CA
!!
GDP YoY
Dec
2.80%
2.50%
2.00%
Wednesday
03/04/2015 08:30
AU
!!
GDP YoY
4Q
2.50%
2.50%
2.70%
03/04/2015 17:30
UK
!!
Markit/CIPS UK Services PMI
Feb
56.7
57.4
57.2
03/04/2015 21:15
US
!!
ADP Employment Change
Feb
212K
219K
250K
03/04/2015 23:00
CA
!!
Bank of Canada Rate Decision
Mar
0.75%
0.75%
0.75%
03/04/2015 23:00
US
!
ISM Non-Manf. Composite
Feb
56.9
56.5
56.7
!!
Mar
03/05/2015 03:00
US
03/05/2015 20:00
UK
!
Thursday
U.S. Federal Reserve Releases Beige
Book
Bank of England Bank Rate
Mar
0.50%
0.50%
0.50%
03/05/2015 20:45
EC
!!
ECB Main Refinancing Rate
Mar
0.05%
0.05%
0.05%
03/05/2015 21:30
US
!!
Initial Jobless Claims
Feb
320K
295K
313K
03/05/2015 23:00
CA
!!
Ivey Purchasing Managers Index SA
Feb
49.7
48.5
45.4
03/06/2015 18:00
EC
!!
GDP SA YoY
4Q
--
0.90%
0.90%
03/06/2015 21:30
US
!!!
Change in Nonfarm Payrolls
Feb
--
240K
257K
03/06/2015 21:30
US
!!!
Unemployment Rate
Feb
--
5.60%
5.70%
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, and Citigroup Global Wealth Management. 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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