DAILY TREASURY OUTLOOK Treasury Research Selena Ling +65 6530-4887 [email protected] Emmanuel Ng +65 6530-4073 [email protected] Wellian Wiranto +65 6530-5949 [email protected] Tommy Xie Dongming +65 6530-7256 [email protected] Barnabas Gan +65 6530-1778 [email protected] OCBC Credit Research Lee Chok Wai +65 6722-2215 [email protected] OCBC Wing Hang Iris Pang +852 2852-5289 [email protected] Timothy Sham +852 2852-5791 [email protected] Treasury Advisory Corporate FX & Structured Products Tel: 6349-1888 / 1881 Interest Rate Derivatives Tel: 6349-1899 Investments & Structured Products Tel: 6349-1886 GT Institutional Sales Tel: 6349-1810 Monday, November 10, 2014 Highlights 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 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 This publication is solely for information purposes only and may not be published, circulated, reproduced or distributed in whole or in part to any other person without our prior written consent. This publication should not be construed as an offer or solicitation for the subscription, purchase or sale of the securities/instruments mentioned herein. Any forecast on the economy, stock market, bond market and economic trends of the markets provided is not necessarily indicative of the future or likely performance of the securities/instruments. Whilst the information contained herein has been compiled from sources believed to be reliable and we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee and we make no representation as to its accuracy or completeness, and you should not act on it without first independently verifying its contents. The securities/instruments mentioned in this publication may not be suitable for investment by all investors. Any opinion or estimate contained in this report is subject to change without notice. We have not given any consideration to and we have not made any investigation of the investment objectives, financial situation or particular needs of the recipient or any class of persons, and accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the recipient or any class of persons acting on such information or opinion or estimate. This publication may cover a wide range of topics and is not intended to be a comprehensive study or to provide any recommendation or advice on personal investing or financial planning. Accordingly, they should not be relied on or treated as a substitute for specific advice concerning individual situations. Please seek advice from a financial adviser regarding the suitability of any investment product taking into account your specific investment objectives, financial situation or particular needs before you make a commitment to purchase the investment product. OCBC and/or its related and affiliated corporations may at any time make markets in the securities/instruments mentioned in this publication and together with their respective directors and officers, may have or take positions in the securities/instruments mentioned in this publication and may be engaged in purchasing or selling the same for themselves or their clients, and may also perform or seek to perform broking and other investment or securitiesrelated services for the corporations whose securities are mentioned in this publication as well as other parties generally. Co.Reg.no.:193200032W Treasury Research & Strategy 6
© Copyright 2024