FW: RHB FIC Rates FX Market Update 231117

 

 

23 November 2017

 

 

Rates & FX Market Update

 

 

USD Remained Under Pressure Despite Fed Signalling Hike

 

Highlights

 

¨   Global Markets: While FOMC participants signalled that the Fed is ready to raise their interest rate benchmark in the near term, very likely in December, Fed minutes also revealed a debate on inflation's outlook with concerns that price pressures could remain low with factors that might prove not to be transitory. Officials however maintained their view that the strong US labour market should push inflation higher. The dovish perceived report supported USTs across the curve and sent the USD lower (-0.75%). The drop was further exacerbated by weak US economic data as Durable Goods Orders contracted in October (-1.2%); remain neutral UST and USD. Against the backdrop of a softer USD, the JPY was the best performing currency under our coverage; the USDJPY pair declined -1.09% nearing the 111 handle. The Euro climbed above 1.18 as reported news showed efforts to revive a political alliance between Angela Merkel's party and the Social Democrats in order to end the political impasse.

¨   AxJ Markets: In Singapore, the economy expanded strongly in the third quarter as the final GDP growth print was revised higher than expected at 5.2% y-o-y. Later today, CPI numbers will be released with headline CPI expected to remain soft. The USDSGD broke and closed below 1.35 with the lows of 2016 and August 2017 at 1.3375/1.3400 in the near sight.

¨   UK Chancellor Philip Hammond presented the budget and slashed economic growth projections to 1.4% in 2018 from 1.6% previously forecasted in March. Hammond announced a number of spending measures aimed to support the housing sector and investment to boost the technology industries. The Sterling initially fell after the economic forecasts were released but later recovered to test October highs in the 1.3320/1.3340 area (+0.58% d-o-d).

 

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.