Friday, August 18, 2017

FW: RHB FIC Rates & FX Market Update - 18/8/17

 

18 August 2017

 

 

Rates & FX Market Update

 

 

Another Setback for Trump Administration Drove 10y UST Below 2.20%

 

Highlights

 

¨   Global Markets: The Trump administration was dealt with another setback yesterday following rumours that Chief Economic Advisor Gary Cohn plans to resign, potentially undermining the President's tax and business reform initiatives made during campaign. The weak sentiment arising from geopolitical risk, domestic protests, and fiscal inaction could further dampen the likelihood of another FFR hike later this year, buttressing further downward pressure on UST yields, with 10y breaking below the 2.20% handle yesterday. We see little value in chasing the UST rally at this juncture, preferring to keep our neutral duration view on USTs ahead of US special elections in November. Meanwhile, lower than expected jobless claims failed to buoy strength on the USD yesterday, with USDJPY diving lower to 109.42 (-0.63%), where we expect the challenging fiscal climate coupled with increasing diversion from geopolitical and political woes to spur weak appetite for USD at this juncture.

¨   AxJ Markets: In a press conference marking his first 100 days in office, President Moon asserted that North Korea's launch of an intercontinental ballistic missile with a nuclear warhead would constitute to crossing the red line. While US has agreed to consulting South Korean leaders before acting against North Korea, regular military drills conducted by US and South Korea could do little to alleviate geopolitical tensions, fuelling our cautious view on KRW assets at this juncture. Gains on KTBs remained marginal vs USTs yesterday, where we expect the lingering geopolitical risk to clip duration appetite for KTBs; maintain mild underweight duration view on KTBs.

¨   In spite of the softer appetite for USD yesterday, EUR depreciated moderately to 1.1726/USD (-0.39%) post ECB minutes released which emphasized the ECB members' concerns on the risk of EUR overshooting higher over the medium term, which could undermine ECB's efforts to promote price stability. Additionally, discussions on monetary policy normalisation indicated ECB's preference for flexibility with careful communication against the backdrop of moderating inflationary pressures and possible markets misinterpretations, underscoring our expectations for ECB to defer decisions for policy normalisation until the asset purchase plan concludes at the end of the year. We reiterate our mildly bullish view on EUR over the medium to long term, with expectations for the pair to challenge the 1.20 resistance over the 6-9 months horizon; ECB's Draghi speech at Jackson Hole likely to reaffirm ECB's less hawkish rhetoric.

 

This message is intended only for the use of the person(s) to whom it is 
addressed and may contain information that is privileged or otherwise protected
from disclosure. If you are not the intended recipient you are hereby notified that
any use, review, disclosure or copying of this message and the information it
contains is prohibited. If you receive the message in error, please notify the
sender by reply e-mail and discard all its contents.
 
Thank You.

 

FW: [Maybank] Risk Appetite Dries Up

 

header

GBL: Risk Appetite Dries Up

Global Markets Daily
by Saktiandi Supaat

FX Research

Wall Street tumbled at the start of the session, weighed by news of a terrorist attack in Barcelona. Risk-off plays resume with UST yields falling below 2.20%, gold making headway towards the psychological-1300-figure and USDJPY back at mid-109 levels. CHF was the only other G10 currency that gained against the greenback on Thu while the rest depreciated as risk appetite dries up. Elsewhere, GBP moves were choppy with post-retail sales gains pared quickly.

FW: RHB | Singapore | July NODX Slowed Slightly, E&E Rebounded

 

 

Economic Research

18 August 2017

Singapore

 

Economic Update

 

 

 

July NODX Slowed Slightly, E&E Rebounded

 

Singapore’s non-oil domestic exports (NODX) slowed to +8.5% YoY in July, from +8.8% the month before, dragged by a sharper contraction in pharmaceutical exports. Shipments of electronics, however, regained some momentum, cushioning some of the downside.

Going forward, improving US labour conditions and strong GDP growth the EU and Japan, as well as a ramp up in electronics production ahead of the new iPhone launch, is likely to support NODX growth for 2H.

We upgrade our forecast for NODX to climb 6.5% in 2017, compared to +3.9% previously and -2.8% the year before.

 

 

Economist:  Ng Kee Chou | +603 92802179

 

 

To access our recent reports please click on the links below:

14 August 2017: 2Q GDP Revised Higher On Stronger Services Output

01 August 2017: Stronger Foreign Inflows Boost June M3 Growth

27 July  2017: June IPI Surges As Underperformers Rebound

25 July  2017: June CPI Rose 0.5% YoY; Consumer Sentiment Weak

18 July  2017: NODX Surges On Machinery Rebound, E&E Slows

17 July  2017: GDP Grew 2.5% YoY In 2Q, To Moderate Further In 2H

 

Economics Team

Lim Chee Sing

Chief Economist

cslim@rhbgroup.com

+603 9280 2153

Peck Boon Soon

Chief ASEAN Economist

bspeck@rhbgroup.com

+603 9280 2163

Vincent Loo Yeong Hong

Malaysia, Vietnam

vincent.loo@rhgroup.com

+603 9280 2172

Ng Kee Chou

Singapore, Thailand

ng.kee.chou@rhbgroup.com

+603 9280 2179

Zhang Fan

China

zhang.fan@rhbgroup.com

+8621 6288 9611

Rizki Fajar

Indonesia, Philippines

rizki.fajar@rhbgroup.com

+6221 2970 7065

Aris Nazman Maslan

Malaysia, Vietnam

mohd.aris.nazman@rhbgroup.com

+603 9280 2184

 

 

 

This message is intended only for the use of the person(s) to whom it is 
addressed and may contain information that is privileged or otherwise protected
from disclosure. If you are not the intended recipient you are hereby notified that
any use, review, disclosure or copying of this message and the information it
contains is prohibited. If you receive the message in error, please notify the
sender by reply e-mail and discard all its contents.
 
Thank You.

 

FW: RHB | Economic Research | Tracking Global News

 

 

 

Economic Research

18 August 2017

Global News

 

Economic Update

 

 

 

Tracking Global News

 

ECB Minutes Imply Flexible Purchasing Approach, Concerns Over Currency Strength As July Inflation Stagnated

 

US Industrial Production Slows in July, On Weaker Manufacturing Activity

 

US Leading Index Eases Slightly, Stronger 2H Growth Expected   

 

Japan Reports Trade Surplus in July as Exports Rise Again

 

Singapore’s NODX Slowed Slightly in July; E&E Rebounded

 

Economist: 

Peck Boon Soon  | +603 9280 2163

Vincent Loo Yeong Hong  | +603 9280 2172

Ng Kee Chou  | +603 9280 2179

Rizki Fajar  | +6221 2970 7065

Aris Nazman Maslan | +603 9280 2184

 

 

 

To access our recent reports please click on the links below:

 

17 August 2017

16 August 2017

15 August 2017

14 August 2017

08 August 2017

 

Economics Team

 

 

 

 

Peck Boon Soon

Chief ASEAN Economist

bspeck@rhbgroup.com

+603 9280 2163

Vincent Loo Yeong Hong

Malaysia, Vietnam

vincent.loo@rhgroup.com

+603 9280 2172

Ng Kee Chou

Singapore, Thailand

ng.kee.chou@rhbgroup.com

+603 9280 2179

Rizki Fajar

Indonesia, Philippines

rizki.fajar@rhbgroup.com

+6221 2970 7065

Aris Nazman Maslan

Malaysia, Vietnam

mohd.aris.nazman@rhbgroup.com

+603 9280 2184

 

 

This message is intended only for the use of the person(s) to whom it is 
addressed and may contain information that is privileged or otherwise protected
from disclosure. If you are not the intended recipient you are hereby notified that
any use, review, disclosure or copying of this message and the information it
contains is prohibited. If you receive the message in error, please notify the
sender by reply e-mail and discard all its contents.
 
Thank You.

 

FW: AmBank Research - Berjaya Food : On the cusp of revival BUY, 18 Aug 2017

 

STOCK FOCUS OF THE DAY         

Berjaya Food : On the cusp of revival                                                                                                                      BUY

 

We come away enthused from our recent meeting with Berjaya Food’s (Bfood) new management team. The strategic direction over Bfood’s non-performing assets is constructive as we eagerly await its fruition. We upgrade our recommendation to BUY from Hold. Our higher fair value of RM1.77/share (from RM1.43/share) is pegged at a higher P/E of 25x, reflecting a 20% premium to its historical valuations from our previous P/E peg of 18x. We think that it is justified as Bfood is on the cusp of revival independent of a potential restructuring exercise, attractive growth off a low base and a stellar Starbucks brand.

 

Independent of the restructuring exercise, we regard Bfood on the brink of a turnaround. Over FY17, it shut the bulk of loss-making stores as KRR Malaysia, KRR Indo and Jollibean closed 10%, 30% and 30% of their total store counts respectively. Therefore, we anticipate significantly lower losses from these assets. On the other hand, Starbucks successfully navigated a 10% ASP hike in Jan 2017. Despite SSSG coming in flat for the quarter, it was still positive as the previous ASP hike in 1QFY16 saw SSSG contract 7%.

 

Others :

Carlsberg Brewery : 2Q17 Earnings surprise                                                                                                          HOLD

Malaysian Pacific Industries : Prospects remain bright but valuations rich                                               HOLD

Press Metal : Value-added products the way to go                                                                                           HOLD

Pos Malaysia : Strong growth sustained                                                                                                                 HOLD

 

 

STOCKS ON RADAR

George Kent, Berjaya Food,Ta Win Holdings, UMW Oil & Gas Corporation

 

 

NEWS HIGHLIGHTS

Oil & Gas Sector  : Petronas tougher on costs, focuses more on downstream

Seacera : Seacera to work with prominent partner on RM10b project

Scomi  : Scomi mulls consolidation and restructuring

HLInd : Hong Leong Industries falls into the red on MNI impairment cost.

 

 

 

FW: CIMB Daily Fixed Income Commentary - 18 Aug 2017 - More White House noise / Regional bonds firm / Fitch affirms Malaysia's A-(Stable)

 

Market Roundup

  • US Treasuries continued to gain, this time amid further White House problems (National Economic Council Director Gary Cohn rumored to resign), and news of a terrorist attack in Barcelona, as well as weak to decent economic data. Data-wise, US industrial production missed expectation to grow 0.2% in Jul against +0.3% consensus (+0.4% in Jun) whilst the Philadelphia Fed index fell to a reading of 18.9 in Aug from 19.5 Jul. The weak numbers added on to recent doubts over growth and reflected the latest FOMC minutes which showed policymakers' mixed view on policy direction. Upcoming highlight will be on Fed's Jackson Hole's event scheduled on 24-26 Aug.
  • On Thursday, MYR opened 40 pips better than the previous day's close following the FOMC minutes inspired USD declines. Early USD weakness pushed MYR to within touching distance of 4.2900, which was then followed by a pull-back after some USD buying. Thereafter with little news to drive markets, MYR remained within a trading range both sides of 4.2930. The open of London trading saw the Euro moving down in two successive moves after technical levels were breached and setting off Euro sell orders. MYR weakened towards the day's lows to 4.2950 with the USD extending its early London gains.
  • Malaysia: Malaysian sovereign yield curve flattened with gains slanted towards the front end of the curve, tracking the positive movement in overnight UST driven by the release of less-hawkish FOMC meeting minutes.
  • Overnight, Fitch indicated it has affirmed Malaysia's sovereign rating at A- with Stable outlook. Fitch said the rating is primarily supported by strong GDP growth, current account surplus but constrained by per capita GDP and governance indicators https://www.fitchratings.com/site/pr/1027939. The Fitch rating action follows this week's Moody's positive comments on Malaysia's rating (A3, Stable) https://www.moodys.com/research/Moodys-Malaysias-credit-profile-relatively-resilient-despite-external-vulnerabilities--PR_371333.
  • Thailand: As with UST movement, Thai bonds gained in a bull-flattening pattern amid choppy trade after UST rose from increasing political risks and dovish Fed minutes. Yields fell across the curve with 2-5bps falling in the intermediates and long-ends mainly aided by local buyers who also bid short-term govvies maturing no longer than 3 months and yields inched 5bps lower Thursday. On the other hand, foreign investors took profit in short-term bonds at Bt2.46 billion for a second day causing net-sell position of Bt2.23 billion.
  • Indonesia: Closed Thursday as Indonesians celebrated Independence Day.



*******************************************************************************************************************************************

FW: 20170818 AmBank FX Daily Outlook

 

 

Highlights of today’s AmBank FX Daily Outlook as follow:-

 

v  Euro declines following the ECB meeting minutes

v  MYR to fluctuate in the range of 4.2711-4.3031 against US dollar

v  Key watch: (i) August US Michigan consumer sentiment; (ii) July Canada inflation rate; (iii) July China house price index; (iv) 2Q Malaysia GDP growth

 

FW: RHB FIC Daily Snapshot 180817

 

RHB FIC DAILY SNAPSHOT

 

 

 

 

 

8/18/2017 8:13

 

 

 

 

 

 

 

 

1-Day

3-Mth

6-Mth

 

17-Aug-17

16-Aug-17

Chg (%)

Avg

Avg

Commodities

 

 

 

 

 

Brent Crude Oct 17

51.03

50.27

1.51

49.67

51.22

Brent Crude Nov 17

50.75

50.10

1.30

49.87

51.47

Brent Crude Dec 17

50.63

50.07

1.12

50.08

51.70

WTI Crude Oil

47.09

46.78

0.66

47.27

49.23

CPO Future Sep 17

2,647

2,624

0.88

2,606

2,683

CPO Future Oct 17

2,658

2,637

0.80

2,556

2,619

CPO Future Nov 17

2,671

2,654

0.64

2,534

2,580

GOLD spot US$/Oz

1,288

1,283

0.37

1,256

1,251

DJ-UBS Metals Subindex

125.1

126.1

-0.79

114.5

114.2

DJ-UBS Agriculture Subindex

48.33

48.33

0.01

51.27

52.16

 

 

 

 

 

 

Forex

 

 

 

 

 

USD/MYR

4.296

4.299

-0.07

4.286

4.346

GBP/USD

1.287

1.289

-0.18

1.293

1.276

EUR/USD

1.172

1.177

-0.37

1.144

1.110

USD/JPY

109.6

110.2

-0.56

111.3

111.6

AUD/USD

0.789

0.793

-0.50

0.769

0.763

USD/SGD

1.367

1.363

0.30

1.376

1.389

USD/HKD

7.824

7.822

0.03

7.805

7.789

USD/KRW

1,137

1,142

-0.38

1,131

1,132

USD/CNY

6.676

6.692

-0.24

6.781

6.835

USD/THB

33.26

33.26

-0.02

33.79

34.23

USD/IDR

13,358

13,377

-0.14

13,326

13,327

USD/PHP

51.29

51.38

-0.18

50.30

50.18

USD/INR

64.15

64.15

0.00

64.38

64.75

 

 

 

 

 

 

 

 

 

 

 

 

Equity Indices

 

 

 

 

 

FBM KLCI

1,776.3

1,773.8

0.14

1,771.0

1,756.4

DJIA

21,750.7

22,024.9

-1.24

21,483.6

21,150.3

S&P 500

2,430.0

2,468.1

-1.54

2,441.7

2,406.6

NASDAQ

6,221.9

6,345.1

-1.94

6,257.1

6,097.1

 

 

 

 

 

 

 

 

 

1-Day

3-Mth

6-Mth

Government Bonds

17-Aug-17

16-Aug-17

Chg (bps)

Avg

Avg

MGS 2/21 (3y)

3.41

3.44

-3.10

3.43

3.43

MGS 03/22 (5y)

3.58

3.62

-4.10

3.63

3.69

MGS 09/24 (7y)

3.90

3.91

-1.00

3.88

3.90

MGS 11/27 (10y)

3.99

3.99

0.10

3.94

3.93

MGS 04/33 (15y)

4.36

4.38

-1.40

4.37

4.43

MGS 07/37 (20y)

4.56

4.57

-1.10

4.56

4.59

MGS 03/46 (30y)

4.74

4.77

-3.20

4.75

4.77

UST 2YR

1.30

1.32

-3.05

1.34

1.30

UST 5YR

1.75

1.78

-3.14

1.81

1.85

UST 10YR

2.19

2.22

-3.67

2.24

2.31

UST30YR

2.77

2.81

-3.34

2.84

2.92

UK 2YR

0.22

0.23

-1.20

0.21

0.16

UK 10YR

1.09

1.11

-1.80

1.13

1.13

GE 2YR

-0.70

-0.71

0.60

-0.66

-0.72

GE 10YR

0.43

0.45

-1.90

0.41

0.37

JGB 2YR

-0.11

-0.11

0.70

-0.12

-0.17

JGB 10YR

0.05

0.04

1.20

0.06

0.06

AU 2YR

1.81

1.82

-1.00

1.72

1.73

AU 10YR

2.64

2.66

-2.00

2.55

2.62

SGS 2YR

1.28

1.28

-0.20

1.23

1.23

SGS 10YR

2.13

2.16

-2.11

2.10

2.16

HK 2YR

0.85

0.89

-4.00

0.79

0.85

HK 10YR

1.57

1.59

-2.50

1.47

1.55

SK 2YR

1.70

1.72

-1.80

1.63

1.61

SK 10YR

2.32

2.33

-1.50

2.23

2.22

CH 10YR

3.63

3.62

0.30

3.60

3.51

TH 2YR

1.41

1.41

0.30

1.45

1.48

TH 10YR

2.40

2.43

-3.90

2.48

2.59

ID 2YR

6.46

6.46

0.00

6.55

6.66

ID 10YR

6.90

6.90

0.00

6.93

7.08

PH 2YR

2.96

2.98

-2.00

2.96

3.02

PH 10YR

4.55

4.56

-0.90

4.56

4.58

IN 2YR

6.35

6.35

0.00

6.50

6.58

IN 10YR

6.53

6.53

0.00

6.52

6.68

 

 

 

 

 

 

Daily Headlines

 

 

 

 

 

Malaysia

 

 

 

 

 

Moody's: Malaysia's credit profile relatively resilient despite external vulnerabilities.

Malaysia's Bad Loans Rise on Construction, Working-Capital Loans.

Global

 

 

 

 

 

Treasuries Rally After Trump Report, Hold Gains Post-Fed Minutes.

Fed's Kaplan Says Pricing Power Hit by Globalization, Technology.

Haven Gains Boost Treasuries as Washington Tension Mounts.

USD/JPY New Low Near 109.50 as Stocks Drop, Treasuries Gain.

Thailand GDP Data May Add Tailwinds to Surging Baht.

 

Related Posts with Thumbnails