20171123-大华银行-Markets_Overview_4页_248kb

Global Economics & Markets Research Summary (23 November 2017)

Markets Overview

• Market Focus: The US and Japan markets were closed for holidays, with attention shifting to Europe. Key data points included the flash Markit manufacturing and service sector PMI readings for November, with expectations of a stable composite PMI at 56.0.
• UK GDP: The second estimate of the UK's 3Q GDP growth was expected to match the initial estimate of $0.4%$ q/q and $1.5%$ y/y, though it would be read against the backdrop of the lower OBR estimates from the budget.
• CBI Survey: The CBI's Distributive Trades Survey for November was also in focus.
• Canada: The retail sales report was due, which would help fine-tune GDP expectations.

Currency Trends

• USD Weakness: The US dollar index fell about $0.78%$ to 93.22, with Asian currencies strengthening further.
• FX Pairs:
  • USD/MyR fell to 4.11
  • USD/CNY eased to 6.60
  • USD/SGD dropped below 1.35 to 1.3470
• PBoC: The USD/CNY central parity fix is predicted to drop to 6.6163 from 6.6290.
• SGD NEER: The SGD NEER model indicates that the S$NEER trades just 1.0% above the estimated mid-point of the neutral policy band.

Equities

• US Markets: Major indexes saw modest pressure after the FOMC minutes were perceived as dovish. The Nasdaq composite closed at a record high of 6,867.36, while the Dow Jones and S&P 500 declined slightly.
• Dow Jones: Declined 64.65 points ($0.27%$) to 23,526.18
• S&P 500: Fell 1.95 points ($0.08%$) to 2,597.08
• Nasdaq Composite: Eked out a record close of 6,867.36, up $0.07%$

US Treasuries

• Yield Curve: The yield curve between 2-year and 10-year notes remained near 10-year lows at 58.5 basis points.
• Treasury Sales: The Treasury Department planned to sell $88 billion in short- and intermediate-dated supply next week, including $26 billion in 2-year notes, $34 billion in 5-year notes, and $28 billion in 7-year notes.

Commodities

• Gold: Prices rose due to weaker-than-expected US data and a dovish Fed summary.
• Oil: Prices surged as a major pipeline disruption in Canada reduced deliveries to the US and crude inventories fell. US light crude hit highs not seen since June 2015.
• US Crude Inventories: Fell by 1.9 million barrels in the week through 17 November, below expectations.
• Gasoline Stocks: Remained unchanged, while distillate stockpiles rose by 269,000 barrels.

Economic News & Data

• US Jobless Claims: Initial jobless claims dropped to 239,000, with the four-week moving average at 239,750.
• Durable Goods Orders: Slid $1.2%$ in October, influenced by a sharp decline in commercial plane orders.
• Consumer Sentiment: The University of Michigan consumer sentiment index fell to 98.5 from a 13-year high.
• UK Budget: Forecasts for economic growth were cut due to weaker productivity, with the PSNB revised down to $2.4%$ of GDP for this fiscal year.
• Singapore GDP: Q3 GDP was upwardly revised to $+5.2%$ YoY, leading to an updated 2017 GDP forecast of $3.0 - 3.5%$ YoY.
• Australia: Construction spending rose $15.7%$ q/q, with the labor market remaining strong.
• New Zealand: Short-term visitor numbers increased by $1.9%$ m/m, but year-on-year growth was lower than in 2016.
• Malaysia: International reserves remained unchanged at USD 101.50 billion.
• China: The Ministry of Finance planned to sell its second tranche of CNH dim sum bonds, though the market has become less active due to previous sell-offs and credit issues.
• India: GVA growth for 3Q was at 5.6%, with GDP growth at 5.7%.

Foreign Exchange Rates (as of 22 Nov 2017)

Stock Indices (as of 22 Nov 2017)

UOB's Estimation of SGD NEER (as of 23 November 2017)

Interest Rates

Bond Yields (as of 22 Nov 2017)

Market Holidays/Events