20171030-大华银行-Markets_Overview_6页_292kb

Global Economics & Markets Research Summary

Core Content

This report provides an overview of global economic and market trends as of 30 October 2017, focusing on key economic data, monetary policy decisions, FX movements, and equity performance. It highlights the importance of upcoming events and data releases that may influence market sentiment and investment strategies.

Main Highlights

Monetary Policy Decisions

• Japan (BOJ): Expected to keep policy rates unchanged. Focus is on inflation and fiscal outlook.
• United States (FOMC): Likely to keep rates unchanged, but the report suggests a potential rate hike in December (WIRP: 85.3%).
• United Kingdom (BOE): Expected to hike rates by 25 bps on 2 Nov, marking the first increase in over a decade (WIRP: 88.4%).

Key Data Releases

• US Data:
  • September PCE (30 Oct) and October labor market report (3 Nov) are key, with expectations of a strong rebound in job creation.
  • US 3Q GDP growth came in at 3.0% (SAAR), beating expectations.
  • Personal consumption growth slowed to 2.4% in 3Q.
• G7 Data:
  • Eurozone preliminary October CPI and GDP, French 3Q GDP, and Japan's September data (unemployment, household spending, IP, housing starts) are highlighted.
• Asia Data:
  • South Korea reports September industrial production and October inflation.
  • Thailand and Indonesia report October inflation data.
  • PMI data for Malaysia, Indonesia, Thailand, Vietnam, South Korea, Taiwan, and India will be released.
  • Singapore reports October PMI, and the Philippines, Indonesia, and Hong Kong report September monetary statistics.

US Tax Reform

• The US House narrowly passed the budget resolution, and the House GOP tax bill is expected to be released on 1 Nov.
• The report indicates that the tax reform is progressing and may influence economic policy in the coming months.

FX Movements

• USD: Broke out of a consolidation range, rising 4% from September lows.
• EUR/USD: Fell to 1.1575, the lowest in two sessions.
• GBP/USD: Depreciated to 1.3128.
• JPY: Rebounded to 113.67, with USD/JPY reaching an intraday low.
• SGD: Traded at 1.3648/USD, with UOB predicting a range of 1.3659–1.3591 based on the SGD NEER.
• Other Currencies:
  • AUD and NZD rose against USD due to strong commodity prices.
  • KRW, SGD, THB, and TWD declined against USD.

Equity Performance

• US Equities:
  • US stock prices ended higher on Friday, with the Nasdaq surging 2.2%.
  • The S&P 500 and DJIA also rose, closing at record highs.
• Asian Equities:
  • Nikkei 225 gained 1.24% due to strong performance in healthcare, industrials, and infotech sectors.
  • Hang Seng, Shanghai Composite, and KOSPI also rose.
  • TAIEX fell 0.24%.
• Expectations:
  • Asian stocks are expected to rise on the back of positive US growth data and anticipation of the Fed chair announcement.

US Treasuries

• Yields fell across the curve as investors were spooked by geopolitical tensions in Spain and the potential change in Fed leadership.
• The 2-year yield dropped by 2.7 bps to 1.59%, the 10-year yield fell by 5.4 bps to 2.41%.

Commodities

• Crude oil prices rose, with Brent oil closing above $60 per barrel for the first time in two years.
• Gold prices ended slightly higher, despite strong US equity performance.

Economic News & Data

• China: Industrial profits increased by 27.7% y/y in September, the fastest since 2011, showing resilience in the economy.
• Singapore: Private residential property prices rose 0.7% in 3Q, ending a 15-quarter decline.
• Thailand: Foreign reserves remained stable, and the current account balance was reported.
• Consumer Confidence: UK consumer confidence and business barometer are expected to be released.

Key Information

• US Policy Outlook: The US Fed is expected to hike rates in December, while the BOJ and BOE are likely to keep rates unchanged.
• Asia's Economic Outlook: PMI data will be a key focus, with China's Caixin PMI expected to be released.
• FX Expectations: The SGD NEER is predicted to trade between 1.0% and 1.5% above the midpoint.
• Equity Market Outlook: Positive US growth data and the potential for a Fed chair announcement are expected to boost Asian equity markets.
• Geopolitical Tensions: Spain's political situation and US diplomatic stance on North Korea are key concerns affecting global markets.

Summary Table

This report offers a comprehensive view of the economic and market dynamics in the week leading up to 3 November 2017, emphasizing the interplay between monetary policy, economic data, and geopolitical events.