Daily FX Update, 8 July 2015

v  US industrial production in May gains 0.4% m/m      v  UK trade deficit widened slightly to US$41.9 billion in May v  German industrial production stagnates in May   v  Taiwan's June exports contract for the fifth consecutive month v  Taiwan's consumer prices fell at a slower pace in June v  Philippines’ inflation rate sees a further dip June

OVERNIGHT MARKET UPDATE:

·         US – Industrial production in May gained 0.4% on monthly basis against market expectations of a 0.2% m/m decline. However, manufacturing production weakened sharply, declining 0.6% m/m.  

·         UK – The trade deficit widened slightly to US$41.9 billion in May from USD40.7 billion in the preceding month, with both exports and imports falling 0.8% and 0.1% m/m in nominal terms, respectively.   

·         Euro area – German industrial production stagnated in May, but the overall upward trend remains intact. The industrial output remained unchanged in May compared to a month earlier. Excluding energy and construction, manufacturing output increased by 0.4% m/m.

·         Currency – Greece’s failure to table new proposals sent EUR sharply lower, while the resumption of Chinese equity declines drove AUD to new 5-year lows. GBP followed EUR lower despite some encouraging data.         

·         Rate – Greek uncertainty continued to support the rally in bond markets. European yields down in all markets but Greece. US 10-year Treasury bond yields are off the day’s lows (of around 2.18%), but are at their lowest levels since peaking at around 2.50% in mid-June.  

·         Equity – On the other side of the story, all major European bourses and Chinese stocks were lower yesterday. However, US stock indices were up off the day’s lows and rallying strongly late in the session with newswires attributing gains to energy stocks.          

·         Energy – Crude oil prices registered a slight gain, after a decline in the early session. Volatility in crude oil prices has increased dramatically in July, up by 40% in the last six trading days.     

Precious Metal – Gold prices were weaker despite a risk-off tone in financial markets, as the US dollar was strengthened against some major currencies.

INDICATIVE MAJOR CURRENCIES Last Close  8.05 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.8073 3.7980 3.8340 3.7960 3.8410 JPY/MYR (100) 3.1136 3.0900 3.1250 3.0900 3.1500 SGD/MYR 2.8059 2.7980 2.8330 2.7900 2.8500 EUR/MYR 4.1652 4.1680 4.2040 4.1500 4.2400 AUD/MYR 2.8273 2.8180 2.8520 2.8100 2.8800 GBP/MYR 5.8731 5.8650 5.9020 5.8500 5.9700 USD/JPY 122.28 122.29 122.70 121.89 122.89 EUR/USD 1.0940 1.0840 1.1150 1.0940 1.1050 AUD/USD 0.7426 0.7300 0.7610 0.7410 0.7510