20180612-大华银行-Markets_Overview_6页_223kb

Global Economics & Markets Research Summary (12 June 2018)

Core Content Overview

The document provides a comprehensive analysis of global economic and financial market conditions as of 12 June 2018, focusing on key geopolitical events, currency movements, stock indices, US Treasury yields, commodity prices, and economic data releases.

Key Geopolitical Events

• US-North Korea Leaders' Summit: Scheduled for 9:00am SG time on 12 June. The outcome of the summit is critical, particularly regarding denuclearization terms and a permanent peace mechanism.
• UK Parliament Session: Expected to debate the Brexit bill on the rest of Tuesday.
• US Senate Banking Committee: To vote on the nomination of Richard Clarida as Fed Board Vice Chair and Michelle Bowman as board member.
• Fed FOMC Meeting: Begins on Tuesday (12 June), with no leaks expected before the decision release on 14 June at 2:00am SG time.
• Market Holidays: Markets in the Philippines will be closed for Independence Day on 12 June.

Key Economic Data & Events

US Data

• May CPI: Expected release on 14 June at 2:00am SG time.
• May NFIB Small Business Optimism Survey: Part of the US data docket.
• May Real Average Weekly & Hourly Earnings: Data to be released.
• May Monthly Budget Statement: Expected to be released on 12 June.
• US 3-Year Note Auction: Expected on 12 June.
• US 10-Year Note Reopening: Expected on 12 June.

UK Data

• April Industrial Production: Unexpectedly contracted by -1.4% m/m, below Bloomberg estimates.
• April Trade Deficit: Worsened to GBP5.28bn.
• April Construction Output: Rebounded by +0.5% m/m, but below expectations.
• UK Unemployment Rate (3Mths): Expected to be released on 12 June at 16:30 SG time.
• UK CPIH y/y: Expected on 12 June at 16:30 SG time.
• UK House Price Index y/y: Expected on 12 June at 16:30 SG time.

Asia

• Singapore Retail Sales (April): Expected to be released on 12 June at 13:00 SG time (previous: -1.5% y/y).
• Malaysia Industrial Production (April): Increased by 4.6% y/y, exceeding market expectations.
• Thailand FDI from China: Expected to grow significantly, potentially reducing Japan's share of FDI in the coming years.
• Thailand Foreign Reserves: Expected to be reported on 13 June.
• Indonesia Market Closure: Due to holiday from 13 to 19 June.

FX Market Highlights

• USD Strengthened: Against most major currencies, especially CAD due to US-Canada trade tensions.
• USD/CAD: Reached an intraday high of 1.3028 and closed at 1.2978.
• GBP/USD: Ended lower at 1.3345 due to UK industrial production data and Brexit debates.
• EUR/USD: Rebounded, reaching an intraday high of 1.1821 before closing at 1.1784.
• USD/JPY: Closed higher at 110.03, reflecting a weaker yen due to geopolitical tensions.
• SGD: Expected to trade within a range of 1.3358 - 1.3292 based on SGD NEER forecast.
• RMB Fixing: UOB's model predicts a midpoint of 6.4021/USD, 43 pips stronger than the previous fixing of 6.4064/USD.

Equities Market Highlights

• US Stock Markets: Slight gains despite late sell-off pressure, with the Dow Jones up 0.02%, S&P 500 up 0.11%, and Nasdaq up 0.19%.
• Asian Indices:
  • Nikkei 225: +0.48%.
  • Hang Seng: +0.34%.
  • KOSPI: +0.76%.
  • Shanghai Composite: -0.47%.
  • SET Index: +0.06%.
  • PSEi: +0.39%.
  • STI: +0.15%.
• Philippines Market: Closed for Independence Day on 12 June.

US Treasuries

• Yields Rose: Across the curve, with the 2-year yield up 2.3bps to 2.52%, 5-year yield up 1.2bps to 2.8%, 10-year yield up 0.6bps to 2.95%, and 30-year yield up 0.4bps to 3.09%.
• US 3-Year Note Auction: Stronger bid-to-cover ratio of 2.83, but yield unchanged.
• US 10-Year Note Reopening: Stronger bid-to-cover ratio of 2.59, with lower yield.

Commodities

• Crude Oil: US Nymex WTI closed at $66.10, up 36 cents. London Brent oil remained unchanged at $76.46.
• Gold: Increased by $2.32 to close at $1,300.49, driven by rising geopolitical tensions.
• Reuters CRB Index: Declined by -0.32%.

Economic News & Comments

• IMF Warning: Christine Lagarde warned of rising global economic risks due to trade tensions and potential trade wars.
• ZTE Legislation: US Senate plans to advance legislation to restore penalties on ZTE, following Trump's easing of restrictions.
• UK Industrial Production: April data showed a sharp contraction of -1.4% m/m, surprising markets.
• Japan PPI: Increased to 0.6% m/m and 2.7% y/y from 0.1% m/m and 2.0% y/y in April.
• BSI Large All Industry Survey: Declined by -2.0% q/q in 2Q, from +3.3% in 1Q.

Market Holidays

• Philippines: Independence Day on 12 June.
• Indonesia: Hari Raya Aidilfitri (Eid al-Fitr) from 13 to 19 June.
• Singapore/Malaysia: Hari Raya Puasa on 15 June.
• China/Hong Kong/Taiwan: Dragon Boat Day on 18 June.
• Hong Kong: HKSAR Establishment on 2 July.
• US: Independence Day on 4 July.
• Japan: Marine Day on 16 July.
• Thailand: Asarnha Bucha Day on 27 July and King’s Birthday on 30 July.
• Australia: Bank Holiday on 6 August.
• Singapore: National Day on 9 August.
• Thailand: Queen’s Birthday on 12 August.
• South Korea: Liberation Day on 15 August.

Disclaimer

• This document is for informational purposes only and should not be used for making investment decisions.
• It is not an offer, recommendation, or advice to buy or sell any investment products.
• The views expressed are those of the author and do not reflect the actual trading positions of UOB Group.
• UOB Group makes no representation or warranty regarding the accuracy or completeness of the information.