20180711-大华银行-Markets_Overview_5页_217kb

Global Economics & Markets Research Summary

Core Content

This document provides an overview of global economic and financial market conditions as of 11 July 2018, highlighting key economic indicators, central bank outlooks, foreign exchange (FX) movements, equity indices, commodities, and bond yields. It also includes information on upcoming market events and a disclaimer regarding the informational nature of the content.

Main Highlights

Markets Overview

• Japan: Core machine orders and Tertiary Industry Activity Index for May are scheduled for release.
• Australia: Consumer confidence and housing finance data for May will be released, with a speech by APRA Chairman Wayne Byres on the housing market.
• Euro Area: Spain's house sales data and the ZEW survey for the Euro area are expected to be released.
• US: The PPI report for June is the main focus, alongside the Bank of Canada's policy announcement.

FX Movements

• The US dollar strengthened broadly.
• USD/CNY rose to 6.63, with UOB predicting a central parity fixing rate of 6.6288.
• USD/SGD tested a low of 1.3530 but rebounded to 1.3590.
• AUD/USD weakened to the low 0.74s.
• USD/JPY fell below 111 due to JPY strength.
• USD/KRW jumped above 1,120.
• SGD reverted to a premium of +0.70% against key trading partners' currencies.
• Offshore USD/CNH rose to 6.68, with key resistance levels at 6.6855, 6.7100, and 6.7344.
• PHP weakened further due to the widening trade deficit in the Philippines.

Equities

• Major US equity indexes edged higher, with the Dow Jones up 0.58%, the S&P 500 up 0.35%, and the Nasdaq Composite up 0.04%.
• The UK's first monthly GDP growth estimate showed a 0.3% increase in May, with a 1.5% annual growth rate.
• Australia's NAB business survey indicated little change in business conditions.
• Malaysia's bond and equity foreign selling eased after May and June sell-offs.

US Treasuries

• The US yield curve flattened to its tightest spread since 2007.
• A $33bn 3-year note auction saw the weakest demand in over nine years, with a yield of 2.685%.
• 10-year notes and 30-year bonds are scheduled for release.

Commodities

• Oil prices retreated after the US indicated it would consider waivers for Iranian oil sanctions.
• Gold prices fell due to a stronger US dollar and may re-test a seven-month low.

Economic News & Data

• China's PPI rose to +4.7% YoY in June, while CPI remained stable at +1.9% YoY.
• France's industrial production fell 0.2% m/m in May, marking a third consecutive decline.
• Italy's industrial production rose 0.7% m/m in May, close to expectations.
• UK's CPI was at 2.3% YoY in June, and house prices rose 3.9% YoY in May.
• Indonesia launched the Online Single Submission (OSS) system to enhance FDI inflows, which could support its current account balances and stabilize the rupiah.

Key Information

Upcoming Events

• 11 July:
  • MYR O/N Policy Rate (BNM meeting, expected to keep rate unchanged at 3.25%).
  • US PPI report for June.
• 12 July:
  • MY CPI and UK CPI data.
• 16 July:
  • CN Surveyed Jobless Rate and CN Retail Sales.
• 19 July:
  • US Initial Jobless Claims and Continuing Claims.
• 23 July:
  • SG CPI and SG CPI Core data.

FX Rates (as of 10 Jul 2018)

• EUR/USD: 1.1704 (Asian High: 1.1791, Asian Low: 1.1703, NY High: 1.1763, NY Low: 1.1690)
• GBP/USD: 1.3232
• AUD/USD: 0.7432
• NZD/USD: 0.6808
• USD/JPY: 111.32
• USD/SGD: 1.3578
• USD/CNY: 6.6340
• USD/KRW: 1116.36
• USD/PHP: 53.526

Stock Indices (as of 10 Jul 2018)

• Dow Jones: 24,919.66 (+0.58%)
• S&P 500: 2,793.84 (+0.35%)
• NASDAQ Composite: 7,759.20 (+0.04%)
• Tokyo Nikkei 225: 22,196.89 (+0.66%)
• London FTSE 100: 7,692.04 (+0.05%)
• Frankfurt DAX: 12,609.85 (+0.53%)
• All Ordinaries: 6,342.76 (-0.37%)
• FTSE Straits Times Index: 3,274.83 (+1.42%)
• FTSE Bursa Malaysia KLCI: 1,687.13 (+0.87%)
• Jakarta SE Composite Index: 5,881.76 (+1.28%)
• Thailand SET Index: 16,436.0 (+1.27%)
• Philippines PSEi: 7,233.29 (+0.65%)
• Taiwan Weighted Index: 10,756.89 (+0.34%)
• Korea KOSPI: 2,294.16 (+0.37%)
• Hong Kong Hang Seng: 28,682.25 (-0.02%)
• Shanghai Composite: 2,827.63 (+0.44%)
• India Sensex: 36,239.62 (+0.85%)

Interest Rates

• USD Fed Funds Rate: 1.75-2.00%
• EUR Refinancing Rate: 0.00%
• GBP Repo Rate: 0.50%
• AUD Official Cash Rate: 1.50%
• NZD Official Cash Rate: 1.75%
• JPY Official Cash Rate: 0-0.10%
• MYR O/N Policy Rate: 3.25%
• IDR 7-Day Repo Rate: 5.25%
• THB 1-Day Repo Rate: 1.50%
• PHP O/N Reverse Repo: 3.50%
• INR Repo Rate: 6.00%
• TWD Discount Rate: 1.375%

Bond Yields (as of 10 Jul 2018)

• US 2-Year Bond: 2.57 (+1.0)
• US 10-Year Bond: 2.85 (-0.7)
• JP 10-Year JGB: 0.05 (+0.5)
• EU 10-Year Bund: 0.32 (+2.0)
• UK 10-Year Long Gilt: 1.30 (+5.0)

Market Holidays/Events

• Japan: Marine Day on 16 July.
• Thailand: Asrnha Bucha Day on 27 July, King's Birthday on 30 July.
• Australia: Bank Holiday on 6 August.
• Singapore: National Day on 9 August.
• Philippines: Ninoy Aquino Day on 21 August, National Heroes Day on 27 August.
• Indonesia: Hari Raya Haji on 22 August.
• India: Independence Day on 15 August.
• South Korea: Liberation Day on 15 August.

Disclaimer

• The document is for informational purposes only.
• It does not constitute investment advice.
• UOB Group may have positions in the securities mentioned and may not be responsible for any losses arising from reliance on the information provided.