Daily FX & Market Commentary

Transcription

Please note and carefully read the
Important Disclosure on the last page
Mar 24, 2015
Published from Tuesday to Friday
Market Recap
• Europe stocks fell: Stoxx 600 fell 0.7%,
retreating from its multi-year high, as
Greece and Germany’s Chancellor met in
Berlin and put on public display of finding
common ground to move forward in the
Euro zone.
• US stocks retreat: S&P 500 fell 0.2%
despite some dollar weakness following the
Federal Reserve’s policy statement last
week and a rebound in oil prices.
• China stocks rose: CSI 300 rose 2%,
continuing its ninth consecutive days
winning streak, as property stocks rallied as
markets speculate more policy easing to
come
Table: Daily Market Movement (Mar 23, 2015)
Equity Market Indices
U.S.
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Europe
Stoxx Europe 600 Index
DAX Index
2,104.42
18,116.04
5,010.97
-3.7
-11.6
-15.4
401.24
11,895.84
-2.8
-143.5
Japan
TOPIX Index
Nikkei 225 Stock Average
1,592.25
19,754.36
+11.7
+194.1
China / Hong Kong
Hang Seng Index
Hang Seng China Enterprises
24,494.51
12,177.82
+119.3
+21.4
3,687.73
+70.4
Shanghai SE Composite
Close Change
% Commodity Futures
Energy & Metals
-0.2% WTI Crude Oil (USD/bbl)
-0.1% Brent Crude (USD/bbl)
-0.3% Natural Gas (USD/MMBtu)
COMEX Gold (USD/oz)
-0.7% LME Copper (USD/MT)
-1.2% Bond Yields & CNY
U.S. Treasuries - Yields
+0.7% 3-Month - Yield (%)
+1.0% 5-Year - Yield (%)
10-Year - Yield (%)
+0.5% 30-Year - Yield (%)
+0.2% USD/CNY
+1.9% China Renminbi Spot
Close
47.45
55.92
2.73
1,187.7
%
+3.8%
+1.1%
-1.9%
+0.3%
6,045.0
0.0%
Close Change
0.00
0.00
-0.02
1.39
-0.02
1.91
+0.01
2.51
Close
6.21
%
+0.2%
Data Source: Bloomberg L.P.
Hot News: Talks between Greece and European leaders may
ease tension
Chart: The DAX Index
12500
12000
11500
11000
10500
10000
9500
9000
8500
8000
03/14
05/14
07/14
09/14
11/14
01/15
03/15
Source:, Bloomberg L.P., as of Mar 23, 2015
Merkel met Tsipras in Berlin yesterday
• Yesterday, German Chancellor Angela Merkel met
Greek Prime Minister Alexis Tsipras in Berlin, while
no signals were given by Merkel that the emergency
aid the Greek government is urgently seeking would
be unlocked.
• Merkel encouraged Tsipras to follow the path set out
by Greece’s creditors, saying his country belongs in
Europe and she wants its economy to succeed.
• The German DAX stock market index fell 1.2%
yesterday (chart).
Citi analysts’ view:
• A European official said last week that finance
ministers could gather as early as March 27 to
approve a payment if Greece delivers an adequate
list of reforms, according to Bloomberg.
• Citi analysts believe that the multi-lateral
discussions
between
Greece
and
EU
representatives on March 27 may help to reduce
the tension.
• However, the situation needs to be resolved before
the end of April given the negative impact of
uncertainty on business confidence and economic
activity.
• Citi analysts remain of the view that a third
programme (a new bailout) for Greece will be
necessary. However, the prospects for agreeing on
a third bailout also remain uncertain.
• In the meantime, around €11bn of unspent funds for
bank recapitalisation in the Greek bailout
programme will remain available, but can only be
used at the request of the European Central
Bank/Single Supervisory Mechanism (SSM).
© 2015 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
97.03
1.0946
119.73
1.4952
1.2523
0.7880
0.7653
0.9662
1.3649
1189.51
98.24
1.0971
120.17
1.4990
1.2616
0.7899
0.7675
0.9812
1.3809
1191.81
96.83
1.0768
119.59
1.4839
1.2496
0.7764
0.7549
0.9641
1.3647
1179.45
Short Term
Comment
Neutral
Neutral
Neutral
Neutral
Bullish
Neutral
Neutral
Bullish
Neutral
Neutral
Support
Resistance
95.52
1.0458
118.18
1.4635
1.2390
0.7574
0.7177
0.9557
1.3639
$1,131
101.79
1.1098
121.85
1.5166
1.2835
0.8033
0.7811
1.0240
1.4208
$1,255
Citi Foreign Exchange
Forecast:
0-3
Months
99.82
1.06
122.00
1.49
1.30
0.73
0.70
1.02
1.42
1270
6-12
Months
111.14
0.93
130.00
1.37
1.35
0.70
0.66
1.18
1.45
1240
FX Rate Source: Bloomberg L.P. (cut off time is NY Time 5:00pm)
•
•
•
•
USD weakened: U.S. Existing Home Sales only rose 1.2% in Feb, trailed market estimates.
High yield currencies rose: A weak USD and improving market sentiment supported AUD and NZD yesterday.
GBP underperformed: Concern over U.K. election in May continued to restrain the GBP yesterday.
EUR rebounded: Uncertainty of Greece receded after the German-Greece talk yesterday.
Daily FX Focus
EUR/USD may range trade between 1.0458-1.1098:
1.1254
(55MA)
1.1098 (Jan low)
1.0458 (Mar low)
EUR Outlook:
• We believe that Finland, Ireland, Germany, and
Netherlands are best positioned to gain from euro
depreciation from an export growth angle.
• The ECB models suggest that a 10% drop in the
euro effective exchange rate would add 0.2pp to real
GDP compared to the baseline in year 1, rising to
0.5pp in year 2 and to 0.75pp in year 3.
• ECB models also suggest that a 10% depreciation in
the nominal effective exchange euro would add
0.25pp to the headline HICP inflation rate in year 1,
rising to 0.7pp in year 2 and to 1.2pp in year 3.
• What if the euro were to strengthen unexpectedly?
We would expect the ECB to keep the pace of
purchases at the current rate of €60bn per month,
but look into the possibility of lowering its deposit
rate further perhaps to as low as -50bp.
Source: Bloomberg L.P., data as of Mar 24, 2015
Technical Analysis:
• 1) RSI: Rebounding; 2) Restrained by 55MA
• Technical indicators suggest that EUR/USD may range trade between 1.0458-1.1098. Next resistance may find
at 55MA of 1.1254.
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.
© 2015 Citibank
2
GBP/USD may trade inside 1.4635-1.5166:
1.5166 (18 Mar top)
1.4231
(2010 low)
1.4635 (18 Mar low)
Technical Analysis:
• There is a bullish convergence in RSI in weekly chart.
• We expect GBP/USD may trade inside 1.4635-1.5166 with mild
downside bias.
GBP Outlook:
• The GBP underperformed recently despite
dollar’s broad-based weakness, as the BoE’s
Chief Economist Haldane said U.K. inflation
risks are skewed to downside, downplaying
the expectation of early rate hike by the BoE.
• The GBP may continue to be pressured on
political concerns ahead of the General
Election in May.
• According to the previous election in 2010,
the GBP fell sharply to 1.4231 ahead of the
election before impressive rally for the next 6
months.
• Current GBP price action is similar to the
sharp decline in 2010.
• One concern about the rally is that, there
was a clear majority in 2010 election
whereas markets are expecting a hung
parliament this time.
EUR/GBP may trade inside 0.7263-0.7540:
0.7540 (fibo
0.50)
0.7263 (fibo 0.236)
EUR/GBP Outlook:
• EUR/GBP rebounded recently on GBP’s
weakness due to political uncertainty ahead
of the General Election in May.
• However, we believe the EUR/GBP’s upside
may be limited due to the upbeat U.K.
fundamentals.
• The ECB’s QE measures keep lowering the
bond yields in the EU and further QE is likely
after Sep 2016, while the BoE may start rate
hike in 2016, following the Fed.
• The divergent monetary policy stances
between the ECB and the BoE may pressure
EUR/GBP in medium term.
• Citi analysts expect EUR/GBP may trade
around 0.71 for the coming 0-3 months and
drop toward 0.68 for the coming 6-12 months.
Technical Analysis:
• 1) RSI: rising; 2) The pair rebounded strongly from 0.7014.
• We expect EUR/GBP may trade inside 0.7263-0.7540 range.
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.
© 2015 Citibank
3
Important Economic Data (Mar 23, 2015 – Mar 27, 2015)
Time
Importance
Event
Period Actual
Survey
Prior
Monday
03/23/2015
03/23/2015 05:00
JN
NZ
!!
!
Cabinet Office Monthly Economic Report for March
Westpac Consumer Confidence
1Q
117.4
--
114.8
03/23/2015 19:00
UK
!
CBI Trends Total Orders
Mar
0
9
10
03/23/2015 22:00
03/23/2015 22:30
US
EC
!
!!
Existing Home Sales MoM
Feb
1.20%
1.70%
-4.90%
ECB's Draghi Testifies at EU Parliament Panel in Brussels
03/24/2015 09:35
JN
!
Markit/JMMA Japan Manufacturing PMI
Mar
--
52
51.6
03/24/2015 09:45
CH
!!!
HSBC China Manufacturing PMI
Mar
--
50.4
50.7
03/24/2015 17:00
EC
!!
Markit Eurozone Manufacturing PMI
Mar
--
51.5
51
03/24/2015 17:00
EC
!!
Markit Eurozone Services PMI
Mar
--
53.9
53.7
03/24/2015 17:30
UK
!!!
CPI YoY
Feb
--
0.10%
0.30%
03/24/2015 20:30
US
!!!
CPI YoY
Feb
--
-0.10%
-0.10%
03/24/2015 22:00
US
!
New Home Sales MoM
Feb
--
-1.30%
-0.20%
03/25/2015 05:45
NZ
!!
Trade Balance
Feb
--
325M
56M
03/25/2015 17:00
GE
!
IFO Business Climate
Mar
--
107.2
106.8
03/25/2015 20:30
US
!!
Durable Goods Orders
Feb
--
0.50%
2.80%
5.40%
Tuesday
Wednesday
Thursday
03/26/2015 17:30
UK
!!
Retail Sales Incl. Auto YoY
Feb
--
4.50%
03/26/2015 19:00
UK
!
CBI Reported Sales
Mar
--
20
1
03/26/2015 21:45
US
!
Markit US Services PMI
Mar
--
57
57.1
03/27/2015 07:30
JN
!!!
Jobless Rate
Feb
--
3.50%
3.60%
Friday
03/27/2015 07:30
JN
!!!
Natl CPI YoY
Feb
--
2.30%
2.40%
03/27/2015 20:30
US
!!!
GDP Annualized QoQ
4Q
--
2.40%
2.20%
03/27/2015 22:00
US
!!
U. of Mich. Sentiment
Mar
--
91.8
91.2
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, and Citigroup Global Wealth Management. 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

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