Daily FX & Market Commentary Market Recap Nov 19, 2014

Transcription

Please note and carefully read the
Important Disclosure on the last page
Daily FX & Market Commentary
Nov 19, 2014
Published from Tuesday to Friday
Market Recap
• European stocks rose: Stoxx 600 rose
0.6% as the ZEW survey shows economic
sentiment in Germany rose for the 1st time in
almost a year, beating markets’ expectation.
• Hong Kong/ China stocks fell: HSI fell
1.1% and CSI 300 Index fell 1% as trading
volumes turned lower. Northbound SH-HK
Stock quota balance was Rmb8.16bn,
accounting for 63% of the daily limit while
Southbound also saw an end-day balance of
Rmb9.7bn or 92% of the daily limit.
• Japanese stocks gained : TOPIX Index
rose 2.1% to 1,394 and Nikkei 225 rose
2.2%% to 17,344. Japanese Prime Minister
said it would call an early election and delay
consumption sales tax hike.
Table: Daily Market Movement (Nov 18, 2014)
Equity Market Indices
U.S.
Close Change
% Commodity Futures
Energy & Metals
Close
%
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Europe
2,051.80
17,687.82
4,702.44
+10.5
+40.1
+31.4
+0.5% WTI Crude Oil (USD/bbl)
+0.2% Brent Crude (USD/bbl)
+0.7% Natural Gas (USD/MMBtu)
COMEX Gold (USD/oz)
74.61
78.47
4.24
1,197.1
-1.4%
-1.1%
-2.2%
+1.1%
Stoxx Europe 600 Index
DAX Index
Japan
TOPIX Index
Nikkei 225 Stock Average
China / Hong Kong
Hang Seng Index
Hang Seng China Enterprises
339.30
9,456.53
+2.1
+150.2
6,704.0
0.0%
1,394.88
17,344.06
+28.8
+370.3
23,529.17
10,426.11
-267.9
-128.2
+0.6% LME Copper (USD/MT)
+1.6% Bond Yields & CNY
U.S. Treasuries - Yields
+2.1% 3-Month - Yield (%)
+2.2% 5-Year - Yield (%)
10-Year - Yield (%)
-1.1% 30-Year - Yield (%)
-1.2% USD/CNY
2,456.37
-17.6
Shanghai SE Composite
-0.7% China Renminbi Spot
Close Change
+0.01
0.01
-0.02
1.61
-0.02
2.32
-0.02
3.04
Close
%
6.12
-0.1%
Data Source: Bloomberg L.P.
Hot News: Japan may escape from deflation after delay in
tax hike
Chart: Dollar/Yen rate and TOPIX trends during the
“Abenomics market”: Simultaneous yen
weakening and share price gains
Source: Citi Research, as of Nov 19, 2014
Prime Minister Shinzo Abe deferred tax hike and
dissolved Lower House
• Prime Minister Shinzo Abe announced to defer the
implementation of a second consumption tax hike
initially slated for October 2015 to April 2017.
• He has also announced that the Lower House would be
dissolved on Friday (November 21), and called an early
election in a bid to extend his term and salvage his
Abenomics policies after the country fell into recession.
Citi analysts’ view:
• By postponing the consumption tax hike, the prime
minister has increased the likelihood of an escape
from deflation and increase inflation rate
expectations.
• From past experience, inflationary expectations
may lead to yen depreciation which may send
shares higher (Chart).
• Citi analysts anticipate the TOPIX may break above
1,500 in FY3/15 and also expect strong
performances from financials, which readily benefit
from rising asset prices.
• On Asia, the competitiveness issues from yen
weakness may be most acute in Korea than other
Asian countries because of the net export similarity,
especially in “road vehicles” and “electronics
machinery and equipment”
• Citi analysts anticipate monetary easing pressures,
partly influenced by Bank of Japan action, is highest
in Korea, then China and Thailand, followed by
Singapore and possibly Taiwan. For example, Citi
analysts delayed Taiwan’s rate hike timetable.
© 2014 Citibank
Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited
1
FX & Commodity Technical Corner
YESTERDAY PERFORMANCE
FX TREND
TECHNICAL
CCY
USD
EUR/USD
USD/JPY
GBP/USD
USD/CAD
AUD/USD
NZD/USD
USD/CHF
USD/SGD
GOLD
Close Price
Day High
Day Low
87.93
1.2536
116.86
1.5633
1.1296
0.8720
0.7923
0.9583
1.2979
1196.99
87.98
1.2545
117.05
1.5679
1.1324
0.8747
0.7974
0.9654
1.2993
1204.75
87.18
1.2444
116.34
1.5630
1.1260
0.8682
0.7909
0.9575
1.2958
1183.53
Short Term
Comment
Bullish
Bearish
Bullish
Neutral
Bullish
Neutral
Neutral
Neutral
Neutral
Neutral
Support
Resistance
84.75
1.2214
115.84
1.5606
1.1180
0.8545
0.7661
0.9156
1.2716
$1,032
88.70
1.2703
117.95
1.6003
1.1446
0.8899
0.8052
0.9839
1.3000
$1,200
Citi Foreign Exchange
Forecast:
0-3
Months
87.59
1.23
109.00
1.60
1.15
0.86
0.77
0.98
1.28
1200
6-12
Months
92.65
1.15
115.00
1.51
1.18
0.80
0.72
1.05
1.30
1240
FX Rate Source: Bloomberg L.P. (cut off time is NY Time 5:00pm)
•
•
•
•
GBP pared loss: U.K. CPI growth rate (YoY) rose from 1.2% to 1.3% in Oct, topped market estimates.
EUR rebounded: German ZEW Index jumped from -3.6 to 11.5 in Nov, topped market expectations.
JPY fell: Japan PM Abe announced to delay consumption tax hike and dissolve the Lower House this Friday.
CAD weakened: WTI Oil price fell 1.4% to close at $74.61, which suppressed the CAD yesterday.
Daily FX Focus
USD/CAD may rise toward 1.1467:
1.1467 (Nov top)
1.1180 (55MA)
CAD Outlook:
• Since petroleum product is Canada’s major export
commodity, the plunge in oil price may dampen
Canada’s export income and suppress the CAD in
the short term.
• The U.S. Senate has rejected the Keystone
Pipeline Legislation. It was legislation to approve
construction of TransCanada’s Keystone XL oil
pipeline. The decision may have negative impact
on Canada’s export and the CAD.
• Reflecting the recent slide in energy prices, CPI
inflation may fall below the BoC’s 2% target and
not return until late next year, suggesting a later
date for resumption of BoC rate hikes.
• CAD’s non-commercial net-short positions
increased to 21846 contracts, reflecting
accelerating funds outflow from the currency.
Source: Bloomberg L.P., data as of Nov 19, 2014
Technical Analysis:
• 1) RSI; Rise from neutral level; 2) Uptrend channel; 3) Stay above 55MA
• Technical signals suggest that the upside momentum for USD/CAD is increasing. The pair may test higher to
1.1467.
NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
© 2014 Citibank
2
USD/JPY may rise to 117.95:
Recap:
• JPY weakened as Japan PM Abe
announced the second consumption
tax hike will be deferred until Apr 2017
and dissolve the Lower House this Fri.
117.95-120 (Oct 2007 top
& psychological level)
115.84 (10MA)
Technical Analysis:
• 1) RSI: Overbought region; 2) Stay above 10MA
• Technical signals suggest USD/JPY may rise further to 117.95 and then
120 level, with near-term support at 115.84.
JPY Outlook:
• Currently, the LDP has 294 seats of a
total 480 seats. We believe the
absolute majority hurdle seems
extremely low.
• The victory in election may support
the equity due to the acceleration of
Abenomics and also be a driver of
JPY depreciation.
• Citi analysts expect the Japan
government is now using fourth arrow
of fiscal and monetary stimulus in
combination.
• If the policies look like getting inflation
but no growth, even more downside
pressure in JPY may be seen.
AUD/NZD may trade inside 1.0919-1.1304:
1.1304 (Oct top)
1.0919 (Sep low)
Technical Analysis:
• 1) Recovery after holding above 1.0919 support; 2) RSI: Oversold region;
3) Stochastic oscillator: turning up from bottom
• Technical signals show price may rebound after holding above 1.0919
and trade inside 1.0919-1.1304 range.
Recap:
• AUD/NZD rebounded as Fonterra's
GlobalDairyTrade price index slipped
3.1% at the latest auction.
AUD/NZD Outlook:
• NZD may be pressured as the
weakness in dairy price may reduce
the export income in NZ.
• The RBA released the minutes
yesterday and it highlighted the risk
posed by the Chinese property market
and noted the carry-trade flows from
the BoJ’s easing may hold AUD
above fundamental value.
• As the market do not get excited from
the minutes, AUD will likely
outperform NZD.
NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
© 2014 Citibank
3
Important Economic Data (Nov 17, 2014 – Nov 21, 2014)
Time
Importance
Event
Period Actual
Survey
Prior
NZ
!!
Retail Sales Ex Inflation QoQ
--
0.80%
1.20%
11/17/2014 07:50
JN
!!!
GDP Annualized SA QoQ
11/17/2014 21:30
CA
!
Int'l Securities Transactions
3Q
--
2.20%
-7.10%
Sep
--
--
10.28B
11/17/2014 22:15
US
!
Industrial Production MoM
Oct
--
0.20%
1.00%
11/18/2014 08:30
AU
!!
RBA Minutes of Nov. Meeting
11/18/2014 17:30
UK
!!!
CPI YoY
11/18/2014 18:00
GE
!!
ZEW Survey Expectations
Oct
--
1.20%
1.20%
Nov
--
0.9
-3.6
Monday
11/17/2014 05:45
3Q
Tuesday
Nov
Wednesday
11/19/2014 05:00
US
!
Total Net TIC Flows
Sep
--
--
$74.5B
11/19/2014 07:30
AU
!
Westpac Leading Index MoM
Oct
--
--
-0.10%
11/19/2014 17:00
EC
!!
ECB Current Account SA
Sep
--
--
18.9B
11/19/2014 17:30
UK
!!
Bank of England Minutes
Nov
11/19/2014 21:30
US
!!
Housing Starts MoM
Oct
--
0.80%
6.30%
11/19/2014 21:30
US
!!
Building Permits MoM
Oct
--
0.60%
1.50%
Thursday
-¥1070.1B
¥1111.6B
11/20/2014 07:50
JN
!!
Trade Balance Adjusted
Oct
--
11/20/2014 09:45
CH
!!
HSBC China Manufacturing PMI
Nov
--
11/20/2014 17:00
EC
!!
Markit Eurozone Manufacturing PMI
Nov
--
50.9
50.6
11/20/2014 17:30
UK
!!
Retail Sales Ex Auto YoY
Oct
--
3.90%
3.10%
11/20/2014 17:30
UK
!!
Retail Sales Incl. Auto YoY
Oct
--
3.80%
2.70%
11/20/2014 21:30
US
!!!
CPI YoY
Oct
--
1.60%
1.70%
11/20/2014 21:30
US
!!
Initial Jobless Claims
Nov
--
--
290K
11/20/2014 23:00
US
!!
Existing Home Sales MoM
Oct
--
-0.40%
2.40%
50.3
50.4
Friday
11/21/2014 21:30
CA
!!
CPI YoY
Oct
--
2.00%
2.00%
11/21/2014 21:30
CA
!!
CPI Core YoY
Oct
--
2.20%
2.10%
For any enquiries, please call (852) 2860-0333.
Source: Source: Bloomberg L.P.
(K = Thousand, M = Million, B = Billion)
This document is based on information provided by Citigroup Investment Research, Citigroup Global Markets, Citigroup Global Wealth Management and Citigroup Alternative Investments. It is
provided for your information only. It is not intended as an offer or solicitation for the purchase or sale of any security. Information in this document has been prepared without taking account of the
objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the information, consider its appropriateness, having regard to their objectives, financial
situation and needs. Any decision to purchase securities mentioned herein should be made based on a review of your particular circumstances with your financial adviser. Investments referred to in
this document are not recommendations of Citibank (Hong Kong) Limited (“Citibank”) or its affiliates. Although information has been obtained from and is based upon sources that Citibank believes to
be reliable, Citi analysts do not guarantee its accuracy and it may be incomplete and condensed. All opinions, projections and estimates constitute the judgment of the author as of the date of
publication and are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Past performance is no guarantee of future results. The
document is not to be construed as a solicitation or recommendation of investment advice. Subject to the nature and contents of the document, the investments described herein are subject to
fluctuations in price and/or value and investors may get back less than originally invested. Certain high-volatility investments can be subject to sudden and large falls in value that could equal the
amount invested. Certain investments contained in the document may have tax implications for private customers whereby levels and basis of taxation may be subject to change. Citibank does not
provide tax advice and investors should seek advice from a tax adviser. Investment products: (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations
of any insured depository institution (including Citibank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested. Citi Foreign Exchange: Forecasts are a
joint venture between Citi’s foreign exchange, global macro and technical strategy groups and our developed and emerging markets economists. Under normal circumstances, we expect to present
Forecasts on a monthly schedule although we may offer intra month updates if circumstances dictate. Technical Trend: All views, opinions and estimates derived from CitiFX Technicals (i) may
change without notice and (ii) may differ from those views;, opinions and estimates held or expressed by Citi or other Citi personnel, including Citi Foreign Exchange: Forecast. Should CitiFX
Technicals not cover any major currency pairs, the indication of short-term technical "bullish", "bearish", or "neutral" trends will be based on the result of analysis with various widely known short-term
technical analysis tools, namely RSI, MACD, fibonacci, stochastics, bollinger bands, and simple moving averages.
4

Daily FX & Market Commentary Market Recap Nov 19, 2014

Transcription

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