20180606-大华银行-Markets_Overview_5页_216kb

Global Economics & Markets Research Summary

Core Content Overview

This document provides a comprehensive analysis of global economic and financial market conditions as of June 6, 2018, with a focus on macroeconomic data, central bank outlooks, foreign exchange (FX) movements, equity indices, bond yields, and commodity prices. It also highlights key upcoming economic releases and market holidays.

Key Economic Highlights

• Australia's GDP: The document emphasizes the upcoming release of Australia's Q1 GDP data, with expectations of a 0.9% quarter-over-quarter (q/q) growth and a potential 2.8% year-over-year (y/y) growth. The Reserve Bank of Australia (RBA) has maintained the overnight cash rate (OCR) at 1.5% for 20 consecutive meetings, indicating a cautious stance on monetary policy. The first rate hike is forecasted for Q1 2019.

• FX Market Trends: The US dollar weakened slightly due to improved investor sentiment, with USD/CNY and USD/SGD showing marginal declines. The SGD NEER remains at a 0.90% premium above the mid-point of the policy band. The EUR strengthened after the ECB discussed winding down its QE program and Italian PM Conte ruled out leaving the euro. GBP rose following strong UK service PMI data.

• Equities Performance: US equity indexes ended the week mixed, with the Nasdaq hitting a new record, while the Dow Jones and S&P 500 showed modest gains or losses. Asian equities continued to recover, and currencies like CNY and SGD saw marginal gains.

• Commodities: Oil prices rebounded after a dip, and gold prices rose as the US dollar retreated. The Reuters CRB Index showed a slight increase.

• US Treasuries: US Treasury yields fell on Tuesday, influenced by concerns over Italy's debt and a shift in investor sentiment towards US and German bonds.

• Economic Data: The US non-manufacturing ISM index rose to 58.6, suggesting continued economic expansion. The UK services PMI hit a three-month high, while Japan's real household spending fell, indicating weak domestic demand.

Key Market Indicators

Upcoming Economic Releases

• Australia: Q1 GDP at 9:30am SGT
• Europe: April Industrial Production
• US: April Trade Balance, 1Q Productivity and Labour Costs Revisions
• Canada: April Trade and Building Permits
• Malaysia: April Industrial Production (y/y)
• Thailand: May Consumer Confidence
• Other Releases: Include US Initial Jobless Claims, UK Unemployment Rate, and more.

FX Rates (as of 05 Jun 2018)

UOB's Forecast

• USD/CNY: Expected to be set at 6.4108, slightly lower than the previous day's 6.4157.
• SGD NEER: Mid-point is estimated at 1.3497, with a range of 1.3203 to 1.3741.

Interest Rates (as of 05 Jun 2018)

Bond Yields (as of 05 Jun 2018)

Market Holidays/Events

Main Points

• The RBA is maintaining the OCR at 1.5% for the 20th consecutive meeting, with no immediate rate hike expected.
• The EUR strengthened after ECB discussions and PM Conte's reassurance on remaining in the euro.
• USD/SGD and USD/CNY showed marginal declines, with USD/SGD drifting lower and USD/CNY consolidating around 6.40.
• Asian equities continued to recover, while US equities showed mixed performance.
• US Treasury yields fell due to concerns over Italy's debt and a shift in investor sentiment.
• Oil prices rebounded, and gold prices rose as the US dollar retreated.
• Japan's economic data showed signs of weakness, particularly in real household spending.
• Malaysia's exports rose sharply, but manufacturing PMI and import trends suggest potential export growth challenges.
• The UK services PMI hit a three-month high, indicating strong economic activity.
• UOB's model forecasts continued consolidation in USD/SGD and USD/CNY, with a slight decrease in the USD/CNY central parity rate.

Key Takeaways

• The RBA is expected to maintain its current rate policy for the foreseeable future.
• FX markets showed limited movement, with EUR and GBP gaining, while USD weakened.
• Equity markets were mixed, with the Nasdaq hitting a new high.
• Economic data from the US, UK, and Japan suggested continued expansion but with underlying risks.
• Commodity prices showed mixed results, with oil and gold rising.
• Malaysia's export data was strong, but concerns over the tech sector and trade tensions could affect future growth.