20171016-大华银行-Markets_Overview_4页_298kb

Global Economics & Markets Research Summary

Core Content

This document provides an overview of global economic and market activities for the week of 16 October 2017, highlighting key economic indicators, central bank outlooks, FX rates, equity indices, US Treasuries, commodities, and market holidays. It serves as a comprehensive guide for investors and analysts to understand the macroeconomic and financial market dynamics.

Main Highlights

Markets Overview

• US Economic Docket: The week begins with the October Empire Manufacturing and the September budget statement on Monday. Additional data includes September import prices, industrial production, and the NAHB housing market index on Tuesday. Housing starts and permits will be the highlight on Wednesday, followed by leading indicators and jobless claims on Thursday. The week concludes with September existing home sales on Friday.
• Eurozone: The ZEW indicator for Germany is expected to improve further. The final Eurozone September HICP is likely to confirm flash estimates of 1.5% y/y for the headline and 1.3% for the core.
• UK Focus: The UK data includes September inflation and employment figures. The main focus is on EU Heads of State discussions on Brexit progress on Thursday and Friday.
• Japan: September trade data is due on Thursday, but the attention will be on the General Election on Sunday, 22 October.
• China: The 19th Party Congress starts on 18 October, and key macroeconomic data including CPI, PPI, retail sales, and industrial production will be released throughout the week. The 3Q GDP is expected to moderate to +6.8% YoY.
• Asia: New Zealand and Australia will release CPI data, while the RBA and BoC will have policy discussions. The PBoC will maintain a stable USD/CNY rate, and the BoK will renew its USD 56 bn currency swap line with the PBoC.

Central Bank Outlook

• The US Federal Reserve will have several key speakers, including Dudley, Kaplan, Mester, and Yellen, discussing economic development and monetary policy.
• The Fed will release the Beige Book on Wednesday, expected to show a positive outlook outside hurricane-impacted regions.
• Other central banks, including Bank Indonesia, Bank of Korea, and the Philippines central bank, are expected to maintain their monetary policies unchanged.

FX Rates

• The USD declined slightly after a softer-than-expected core CPI, with EUR/USD peaking at 1.1875.
• USD/JPY struggled near 111.70, and GBP remained volatile due to Brexit news.
• AUD and NZD saw gains, while CAD came under pressure.
• Asian currencies remained firm against the USD, with the PBoC keeping the USD/CNY rate stable at 6.58.
• In Singapore, USD/SGD fell to 1.3500, but market participants expect potential tightening by the MAS in April.

Equities

• Major US equity indexes reached record highs on Friday, driven by strong earnings and lighter-than-expected economic data.
• The Dow Jones, S&P 500, and Nasdaq composite posted slight weekly gains.
• The S&P 500 and Dow recorded their fifth consecutive weekly gains, while the Nasdaq had three.

US Treasuries

• US Treasuries fell as markets digested economic data and Fed speeches.
• The 2-year yield was around 1.50%, and the 10-year yield was around 2.28%.

Commodities

• Oil prices rose due to strong Chinese import data and Middle East turmoil.
• Gold and silver saw positive movement, with gold on track for its first weekly rise in five weeks.
• Platinum and palladium also recorded gains.

Key Economic Indicators

Key FX Rates

Market Holidays/Events

Summary of Key Events

• China's 19th Party Congress starts on 18 October, with expectations of Xi Jinping's reconfirmation and key policy directions.
• US CPI increased by 0.5% in September, with the core CPI rising to 2.2% y/y.
• US Retail Sales surged by 1.6% in September, influenced by hurricane-related reconstruction efforts.
• Japan's General Election on 22 October is expected to draw significant attention.
• Singapore's MAS is under pressure to consider tightening monetary policy in April due to strong economic performance.
• Brexit remains a central theme, with EU Heads of State meeting on Thursday and Friday to discuss progress.
• Central Bank Meetings: Bank Indonesia, Bank of Korea, and the Philippines central bank are expected to maintain current policies.
• Commodity Prices: Oil prices rose due to Chinese demand and Middle East tensions, while gold, silver, platinum, and palladium also showed gains.

Summary of Key Data Releases

• September CPI: 0.5% m/m, 2.2% y/y (core CPI 1.7% y/y).
• September Retail Sales: 1.6% m/m, 4.4% y/y.
• University of Michigan Sentiment: Rose to a 13-year high of 101.1 in October.
• China's CPI and PPI: Expected to be released on 16 October, with 3Q GDP expected to moderate to +6.8% YoY.
• US Industrial Production: Expected to show a slight decline in September.
• UK CPIH: Expected to be released on 16 October.
• Japan's Trade Balance: Expected to be released on 16 October.
• Singapore's GDP: 3Q GDP at 4.6% m/m and 17.0% y/y.
• Indonesia's Motorcycle Sales: Fell by 1.7% YoY in September.
• Thailand's Tourism Forecast: Slightly downgraded to 33-34 million arrivals for the year.

Summary of Key Policy Notes

• Singapore's SGD NEER: Expected to remain neutral, but potential tightening is anticipated in April.
• China's Monetary Policy: The PBoC governor reiterated the need for a prudent monetary policy and risk management in shadow banking and real estate.
• Currency Swap Lines: The BoK renewed its USD 56 bn bilateral swap line with the PBoC, and ASEAN nations will renew their USD 2 bn swap agreement from 17 November.
• US Treasuries: The 2-year yield at 1.50% and the 10-year yield at 2.28%.
• FX Market Trends: USD/SGD fell, but Asian currencies remained firm against the USD.

Summary of Key Equity Indices