FW: RHB | FIC Rates & FX Market Update - 27/6/18

 

 

 

27 June 2018

 

 

Rates & FX Market Update

 

 

Strong Singapore IP Anchored SGD against Regional FX

 

Highlights

 

¨    Global Markets: Markets were once again dominated by trade tensions and geopolitical news flows. On the latter, US President is pressing its allies to stop Iranian oil imports pushing Brent higher despite the Saudi increase output. While in theory rising inflationary pressure should push US Treasury yields higher, trade tensions kept yields in balance and Treasuries closed the day flat. On FX markets, the USD rose across the board; the EURUSD closed -0.46% lower since ECB Lane (Governor of the Central Bank of Ireland) said that inflation is rising but below its target.

¨    AxJ Markets: Over in Singapore, IP surged 11.1% y-o-y (consensus: 10.0%), driven by pharma and petrochemicals, and continues to showcase Singapore’s economic strength in these areas. SGD outperformed most regional currencies overnight on the solid print, although global trade tension persists which continue to generate headwinds for the export-dependent nation; stay neutral SGD.

¨    CNY fell c.0.6% against the USD overnight, extending its losing streak against the Greenback as doubts over the resiliency of the Chinese economy on any major trade war with the US surfaced. PBOC weakened its fixing by 0.6% to 6.5569, although markets are looking for an even weaker Yuan over the coming days, especially as PBoC remains on easing mode; stay neutral CNY over the medium term.