Daily Treasury Outlook

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DAILY TREASURY OUTLOOK
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Monday, March 09, 2015
Market sentiment was served a reminder of the prospect of Fed Fund rates
hike, after US reported strong employment figures. At 295k, February’s NFP
figure exceeded expectations. It also marked the 12th month that the jobs
data came above 200k, with the bulk of improvement lately which saw the
figure averaging 293k for the past six months. Unemployment fell to 5.5%,
the lowest since May 2008. The strength in the number of jobs created is yet
to be matched by stronger wage gains, however, with pay seeing an uptick of
just 0.1% mom, compared to 0.2% expected. Still, overall, the employment
report added to the Fed’s “liftoff” prospects, with the USD seeing another
spurt of strength in particular.
Elsewhere, the Eurozone economy grew by 0.3% qoqsa (+0.9% yoy) in
4Q14, in line with market expectations while Japan’s 4Q GDP figures printed
1.5% qoq saar (mkt est: 2.2%). For today, watch out for Canada’s Feb
housing starts and Taiwan’s Feb trade data.
Singapore’s economic growth is expected to print between 2-4% in 2015,
according to Trade Minister Lim Hng Kiang. He warned however, that the
economy is to see a persistent tight labor market.
Exports growth unexpectedly spiked in February, up by 48.3% yoy while
imports contracted by 20.5% yoy. The divergence between export and import
growth led to the surge in trade surplus to US$60.6bn.
Overall residential property price increased for the tenth straight month by
2.2% mom in January (+16.1% yoy). Price of small-sized flats climbed 16.4%
yoy while that of large-sized flats rose 8.1% yoy. Residential property
transaction volume fell 6.0% mom to 6,027 units in February as transactions
usually fall during Chinese New Year.
Bank of Korea is reportedly considering expanding a program to support
small companies, by raising the ceiling of cheap loans to these companies
from the current KRW15tn. It last expanded the program in September when
it raised the ceiling from KRW12tn. The government is allegedly asking the
BOK to double the current ceiling to KRW30tn.
The central bank reported that Indonesia’s foreign exchange reserves stood
at $115.5bn as of the end of February, marking another month of reserve
accumulation as it seeks to buttress defences against potential capital
outflows.
Exports data for January underwhelmed, contracting by 0.6% yoy against
expectation of 2.5% expansion. Trade balance did stay high, however, at just
over MYR9bn, as imports saw a significant dip, dropping by 5.3% yoy
compared to 4.2% increase of the previous month.
The substantial strengthening of the US dollar had led to the fall of most of
the commodity futures last week, especially precious metals. Gold fell to
$1,164.3/oz (-2.7%) while Silver touched $15.78/oz (-2.2%). Crude oil fell too,
but the magnitude of the fall is likely cushioned by OPEC’s latest comment
that the oil market will return to balance in the second half of the year from
the over-supply phenomenon seen at this juncture.
9 March 2015
Daily Treasury Outlook
Major Market

Wall Street washed in a sea of red as investors worry about a Fed rate hike after a strong US
labor prints: Dow -1.54%, S&P 500 -1.42% and Nasdaq -1.11%. The markets suffered a broadbased decline as all 10 main groups in the S&P500 suffered losses. However, Apple Inc. continued
to edge higher as it was due to be added in to the Dow while Bank of America Corp. also advanced
after the Fed announced that all 31 big banks have passed the latest stress test.

US Treasury bonds sank: The 2- and 10-year bond yields were at 0.72% (+8 bps) and 2.24% (+13
bps). US Treasury bonds experienced the largest one-day selloff since Nov 2013 after the strong US
jobs report stoked fears of an earlier rate hike.

Singapore: The STI gained 0.66% to 3,417.51 at closing last week, led by gains in Noble Group
(+5.0%), and Thai Beverage (+2.8%), while losses in Genting Singapore (-2.6%) and Global
Logistics Properties (-1.9%) limited the gains. For today, the index will likely see further downside
risk given the weakness in Wall Street last week.

China: The trade data was largely distorted by Chinese New Year effect as local exporters tend to
make concentrated shipments ahead of the Chinese New Year. Combining Jan and Feb data
together, export grew by 15% yoy, still on the strong side supported by solid demand from US and
ASEAN, which rose up by 21% and 38.2% respectively. China’s imports remain weak due to soft
commodity prices. The imports of crude oil and iron ore fell by 46.4% and 39.3% respectively by
value in Feb despite the fact that both imports by volume recovered to 11%. Given that commodity
prices are likely to stay low, the base effect is likely to cap China’s import growth further in the
coming months. As such, China’s trade balance is likely to remain at a sizable scale.
The Governor of Shandong province Guo Shuqing, who is also ex CSRC head, said some parts of
his province may face difficulties to pay off the debt. As such, it may repay the debt through
restructuring or selling off of some assets. Nevertheless, he assured the market that the province will
certainly repay the money.


Hong Kong: We expect residential property prices would see moderate correction starting March
mainly dragged by small-sized flats due to HKMA’s new mortgage rules announced in late February
and early March,. But residential rental is likely to hold up as some end-users would shift to the
rental market. Meanwhile, transaction volume is expected to fall to a very low level and may stay
below 4,000 units per month which were last seen in 2013 and early 2014.

Macau: Job vacancies in the gaming sector dropped by 57.7% yoy at the end of 4Q14, the largest
year-on year drop since 4Q08. The vacancy rate (number of vacancies as % of number of full-time
employees) also fell to 1.4%, the lowest since 4Q09. The slump in job vacancies reflects the weak
labor demand in the gaming sector and weak business outlook viewed by casino operators amid
worsening gaming revenue. Looking forward, though hiring from new casinos scheduled to launch in
2H could provide some support to employment in 2015, the drop in job vacancies could be a sign of
rising pressure on labor market in the gaming sector.

Malaysia: The Bursa stayed largely unchanged at 1806.96 on Friday, but may see some softness
today given the global market backdrop.
Treasury Research & Strategy
2
9 March 2015
Daily Treasury Outlook
Bond Market Updates

Market Commentary: Last Friday, the SGD swap rates traded 2-5bps lower across the curve. In
the SGD corporate space, flows were relatively light with focus on perpetual papers. There
continued to be buying interest in the newly issued FCLSP 5% perp-c20 while we saw mixed
activities in CHEUNG 5.125% perp-c16 and HYFSP 5.75% perp-c17.

New Issues: ICBC Financial Co Ltd is planning a USD issue with investor meetings commencing
today.
Treasury Research & Strategy
3
9 March 2015
Daily Treasury Outlook
Key Financial Indicators
Foreign Exchange
Day Close % Change
DXY
97.615
1.28%
USD-JPY
120.830
0.58%
EUR-USD
1.0844
-1.69%
AUD-USD
0.7716
-0.85%
GBP-USD
1.5037
-1.33%
USD-MYR
3.6500
0.04%
USD-CNY
6.2631
-0.05%
USD-IDR
12976
-0.11%
USD-VND
21350
-0.02%
USD-SGD
EUR-SGD
JPY-SGD
GBP-SGD
AUD-SGD
NZD-SGD
CHF-SGD
SGD-MYR
SGD-CNY
Day Close % Change
1.3776
0.48%
1.4938
-1.22%
1.1405
-0.07%
2.0717
-0.84%
1.0631
-0.37%
1.0148
-1.09%
1.3975
-0.71%
2.6639
-0.12%
4.5459
-0.53%
Equity and Commodity
Index
Value
DJIA
17,856.78
S&P
2,071.26
Nasdaq
4,927.37
Nikkei 225
18,971.00
STI
3,417.51
KLCI
1,806.96
JCI
5,514.79
Baltic Dry
565.00
VIX
15.20
Interbank Offer Rates (%)
Tenor
EURIBOR
1M
-0.0080
2M
0.0150
3M
0.0360
6M
0.1070
9M
0.1580
12M
0.2250
Change
-0.0010
-0.0010
--0.0010
--0.0010
Tenor
O/N
1M
2M
3M
6M
12M
USD Libor
0.1215
0.1750
0.2165
0.2646
0.3976
0.6881
Government Bond Yields (%)
Tenor
SGS (chg)
UST (chg)
2Y
1.13 (-0.02) 0.72 (+0.08)
5Y
1.76 (-0.01) 1.69 (+0.12)
10Y
2.32 (-0.01) 2.24 (+0.13)
15Y
2.63 (--)
-20Y
2.77 (--)
-30Y
2.86 (--) 2.84 (+0.11)
Singapore Rates (%)
Tenor
SOR Fixing
1D
0.2338
1M
0.7792
3M
0.9000
6M
1.0292
Change
0.0004
0.0177
-0.0344
0.0000
Tenor
1M
3M
6M
12M
Change
--0.0015
0.0010
0.0005
-0.0007
Financial Spread (bps)
Value
LIBOR-OIS
13.65
EURIBOR-OIS
10.60
TED
25.95
SGD SIBOR Change
0.7054
0.0143
0.8129
0.0202
0.8801
0.0213
0.9796
0.0269
Net change
-278.90
-29.80
-55.40
219.20
22.20
0.90
63.80
4.00
1.20
Change
0.10
0.50
0.10
Eurozone & Russia Update
2Y Bond Ylds (bpschg) 10Y Bond Ylds (bpschg)
Portugal
Italy
Ireland
Greece*
Spain
Russia*
0.20
0.18
0.07
14.04
0.12
5.12
3.80
1.50
0.00
-20.20
0.80
-6.70
1.76
1.32
0.87
9.41
1.30
5.08
-3.40
1.20
-0.50
-10.70
1.40
0.00
10Y Bund
Spread %
1.37
0.92
0.48
9.01
0.90
4.69
CDS
118.07
98.95
47.15
452.30
83.06
454.14
CDS
Change
-10.49
-7.95
-1.29
--8.53
-16.24
Equity
Index
2529.27
22436.13
6021.17
850.27
11091.90
1728.55
% Change
0.84
0.16
0.06
-0.85
-0.29
-32.00
* Shows 3-year bond yields rather than 2-year
Commodities Futures
Energy
WTI (per barrel)
Brent (per barrel)
Heating Oil (per gallon)
Gasoline (per gallon)
Natural Gas (per MMBtu)
Futures
49.61
59.73
1.869
1.88
2.839
% chg
-2.27%
-1.24%
-0.44%
-0.29%
-0.07%
Soft Commodities
Coffee (per lb)
Cotton (per lb)
Sugar (per lb)
Orange Juice (per lb)
Cocoa (per mt)
Futures
1.365
0.6295
0.1344
1.1600
3,023
% chg
3.76%
-0.41%
--2.68%
-1.69%
Base Metals
Copper (per mt)
Nickel (per mt)
Aluminium (per mt)
Futures
5,745.0
14,317
1,773.3
% chg
-1.54%
1.21%
-1.00%
Grains
Wheat (per bushel)
Soybean (per bushel)
Corn (per bushel)
Futures
4.8575
9.793
3.7925
% chg
0.94%
--0.91%
Precious Metals
Gold (per oz)
Silver (per oz)
Futures
1,164.3
15.784
% chg
-2.67%
-2.16%
Asian Commodities
Crude Palm Oil (MYR/MT)
Rubber (JPY/KG)
Futures
2,312.0
216.3
% chg
-1.62%
-0.92%
Source: Bloomberg, Reuters
(Note that rates are for reference only)
Treasury Research & Strategy
4
9 March 2015
Daily Treasury Outlook
CFTC Commodities Futures and Options
For the week ended: 03 Mar 2015
Current
Previous
Net Chg
Current
Previous
Net Chg
Soybean
34,636
15,013
19,623
Sugar
-23,332
23,729
-47,061
Heating Oil
-13,541
-23,666
10,125
Corn
132,072
153,958
-21,886
Copper
-22,782
-29,993
7,211
Wheat
-37,050
-26,629
-10,421
Cotton
61,383
55,164
6,219
Gold
128,512
138,865
-10,353
RBOB Gasoline
72,371
68,700
3,671
Nymex Crude
295,246
304,427
-9,181
Cocoa
61,469
59,217
2,252
Coffee
495
9,605
-9,110
Palladium
21,777
19,581
2,196
Lean Hogs
28,939
35,591
-6,652
Live Cattle
62,529
61,432
1,097
Silver
31,363
37,730
-6,367
Platinum
24,025
24,375
-350
Natural Gas
-234,731
-230,832
-3,899
Source: CFTC
Key Economic Indicators
Date
06/03/2015 12:00
06/03/2015 13:00
06/03/2015 13:09
06/03/2015 15:00
06/03/2015 15:00
06/03/2015 15:30
06/03/2015 15:45
06/03/2015 16:55
06/03/2015 17:00
06/03/2015 18:00
06/03/2015 18:00
06/03/2015 21:30
06/03/2015 21:30
06/03/2015 21:30
06/03/2015 21:30
06/03/2015 21:30
06/03/2015 21:30
06/03/2015 03/13
08/03/2015 10:51
08/03/2015 10:51
08/03/2015 10:51
09/03/2015 07:50
09/03/2015 07:50
09/03/2015 07:50
09/03/2015 07:50
09/03/2015 07:50
09/03/2015 07:50
09/03/2015 08:30
09/03/2015 08:30
09/03/2015 13:00
09/03/2015 13:00
09/03/2015 15:00
09/03/2015 15:00
09/03/2015 15:00
09/03/2015 15:00
09/03/2015 15:30
09/03/2015 16:00
09/03/2015 16:00
09/03/2015 16:00
09/03/2015 20:15
MA
JN
ID
GE
GE
TH
FR
HK
IT
EC
EC
CA
CA
US
US
US
US
VN
CH
CH
CH
Event
Exports YoY
Leading Index CI
Foreign Reserves
Industrial Production SA MoM
Industrial Production WDA YoY
Foreign Reserves
Trade Balance
Foreign Reserves
PPI MoM
GDP SA QoQ
GDP SA YoY
Building Permits MoM
Int'l Merchandise Trade
Change in Nonfarm Payrolls
Change in Manufact. Payrolls
Unemployment Rate
Trade Balance
Domestic Vehicle Sales YoY
Trade Balance
Exports YoY
Imports YoY
Jan
Jan P
Feb
Jan
Jan
Feb-27
Jan
Feb
Jan
4Q P
4Q P
Jan
Jan
Feb
Feb
Feb
Jan
Feb
Feb
Feb
Feb
JN
JN
JN
JN
JN
JN
TA
AU
JN
JN
GE
GE
GE
GE
FR
TA
TA
TA
CA
BoP Current Account Balance
Trade Balance BoP Basis
GDP SA QoQ
GDP Annualized SA QoQ
GDP Nominal SA QoQ
GDP Deflator YoY
CPI YoY
ANZ Job Advertisements MoM
Eco Watchers Survey Current
Eco Watchers Survey Outlook
Trade Balance
Current Account Balance
Exports SA MoM
Imports SA MoM
Bank of France Bus. Sentiment
Trade Balance
Exports YoY
Imports YoY
Housing Starts
Jan
Jan
4Q F
4Q F
4Q F
4Q F
Feb
Feb
Feb
Feb
Jan
Jan
Jan
Jan
Feb
Feb
Feb
Feb
Feb
Survey
2.50%
105.8
-0.50%
-0.20%
--3000M
--0.30%
0.90%
-4.00%
-1.00B
235K
10K
5.60%
-$41.1B
-$6.00B
14.00%
-10.00%
Actual
-0.60%
105.1
$115.53B
0.60%
0.90%
$156.9B
-3726M
$332.5B
-1.60%
0.30%
0.90%
-12.90%
-2.45B
295K
8K
5.50%
-$41.8B
-$60.62B
48.30%
-20.50%
Prior
2.70%
105.6
$114.25B
0.10%
-0.70%
$157.3B
-3446M
$324.8B
-0.80%
0.30%
0.90%
7.70%
-0.65B
257K
22K
5.70%
-$46.6B
80.10%
$60.03B
-3.30%
-19.90%
Revised
-105.3
-1.00%
0.50%
--3296M
----6.10%
-1.22B
239K
21K
--$45.6B
---3.20%
-19.70%
¥270.4B
-¥936.0B
0.50%
2.20%
1.10%
2.30%
0.20%
-46.5
50.2
19.5B
16.5B
-1.50%
0.50%
98
$3.50B
0.10%
-6.00%
179.0K
¥61.4B
-¥864.2B
0.40%
1.50%
1.00%
2.40%
--------------
¥187.2B
-¥395.6B
0.60%
2.20%
1.10%
2.30%
-0.94%
1.30%
45.6
50
19.1B
25.3B
3.40%
-0.80%
98
$4.80B
3.40%
-4.80%
187.3K
----------18.9B
---0.70%
------
Source: Bloomberg
Treasury Research & Strategy
5
9 March 2015
Daily Treasury Outlook
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Treasury Research & Strategy
6