20171130-大华银行-Markets_Overview_4页_255kb

Global Economics & Markets Research Summary (30 November 2017)

Core Content

This document provides an overview of global economic and market conditions as of 30 November 2017, highlighting key events, economic data, currency movements, interest rates, bond yields, and commodity prices. It also includes forecasts and analyses from the UOB Group, focusing on market trends and potential impacts on various regions and asset classes.

Key Events & Data Highlights

US Market

• Key Events:
  • The Fed Beige Book indicates a slight improvement in the US economy and stronger inflation pressures.
  • Janet Yellen, in her final public appearance before stepping down, suggests continued rate hikes if the economy strengthens.
• Economic Data:
  • US 3Q GDP growth was revised up to 3.3% saar, with through-year growth at 2.3% y/y.
  • US core PCE deflator for October rose to 1.4% saar.
  • US personal income and spending data for October will provide insight into the performance of the household sector in Q4.
  • The November Chicago PMI will refine forecasts ahead of the manufacturing ISM report on Friday.
  • US initial jobless claims and continuing claims are expected to be released.
• Stock Indices:
  • The Dow Jones closed at an all-time high of 23,940.68 (+0.44%).
  • The S&P 500 finished just below the flatline at 2,626.07.
  • The Nasdaq Composite closed 1.3% lower at 6,824.34.
• FX Market:
  • The USD edged higher, supported by strong US economic data and Yellen's comments.
  • EUR/USD tested 1.1818 lows, while USD/JPY rose to around 112.
  • GBP strengthened due to potential Brexit settlement agreement.
  • CAD weakened to a four-week low as oil prices fell.
  • KRW surged 0.7% to 1,076.90/USD.
  • MYR hit 14-month highs at 4.0817/USD.
  • THB, PHP, and CNY showed mixed movements.
  • SGD remained near 1.3470/USD, with bulls struggling to break above 1.3440.

Euro Area

• Key Events:
  • The ECB reported that the euro area remains stable, but risks to financial stability include global risk premia repricing, weak bank profitability, and debt sustainability concerns.
• Economic Data:
  • Euro area headline HICP inflation is expected to rise to 1.6% y/y.
  • Core HICP inflation is projected to increase slightly from 0.9% y/y.
  • Germany's retail sales and labor market data will be released.
  • Italy's October unemployment data is due.
  • The European Commission's economic sentiment index hit a 16-year high at 114.6 in November.
• FX Market:
  • GBP rose against the USD.
  • EUR closed at 1.1847, with a range between 1.1818 and 1.1900.

Asia

• Key Events:
  • South Korea's industrial production unexpectedly contracted 5.9% y/y in October, the weakest since February 2013.
  • China's manufacturing and non-manufacturing PMI for November will be released.
  • Thailand's trade and BoP current account balance for October will be announced.
• FX Market:
  • KRW is expected to rise due to the Bank of Korea's likely rate hike.
  • MYR, THB, PHP, and CNY showed mixed movements.
  • SGD bulls are struggling to move past 1.3440.

Other Markets

• Commodities:
  • Gold fell due to improved US growth data and rising yields.
  • Palladium, Silver, and Platinum also declined.
  • Oil prices slipped due to conflicting statements from oil ministers ahead of the OPEC meeting in Vienna.
• Bond Yields:
  • US 2-year and 10-year yields rose.
  • British 10-year yields also increased.
• Interest Rates:
  • Bank of Korea is expected to increase rates by 25bp to 1.50%.
  • Australia's OCR remains at 1.50%.
  • UK's Bank Rate is at 0.50%.
  • Japan's JPY rate is at 0-0.10%.
  • SGD 3-Mth SIBOR at 1.13%.
  • MYR O/N Policy Rate at 3.00%.
  • THB 1-Day Repo Rate at 1.50%.
  • PHP O/N Reverse Repo at 3.00%.

UOB's Forecast

• SGD NEER is estimated to be between 1.3893 (lower-end) and 1.3348 (upper-end), with a mid-point of 1.3615.
• The US ISM Non-Manf. Composite is expected to be released on 30 November.

Market Holidays/Events

• PH: Bonifacio Day on 30 November.
• MY: Birthday of Prophet Muhammad on 1 December.
• ID: Maulid Nabi Muham on 1 December.
• TH: King's Birthday on 5 December and Constitution Day on 11 December.
• SG/MY: Christmas Day on 25 December.

Summary of Main Points

• The US economy showed slight improvement with stronger-than-expected GDP growth and rising inflation pressures.
• The ECB highlighted financial stability but noted key risks to the euro area.
• South Korea's industrial production contracted, while China and Thailand are expected to release key PMI data.
• Asian currencies showed mixed movements, with KRW and MYR rising, while CNY lagged.
• The USD strengthened, while EUR and GBP showed mixed trends.
• Commodity prices were volatile, with gold and oil falling.
• Bond yields increased in the US and UK.
• The Bank of Korea is expected to raise rates, potentially ending its easing cycle.