FW: RHB FIC Rates & FX Market Update - 3/4/14

3 April 2014

Rates & FX Market Update

Upward Yield Bias on ‘Safety Assets’ Given Data Optimism; Currencies Range Traded 

Highlights

¨    US: Better ADP private sector payrolls fuels optimism ahead of the NFP report; UST underperformance led by the belly

¨    UK: UK continues to lead pace of recovery amongst DM; better services PMI tonight could weigh on GILTs demand; 7y and 10y Gilts led overnight weakness

¨    Eurozone: Spain recovery optimistic with bullish unemployment data; 5y bund auction well supported; EUR fell

¨    Japan: Improvements in the service and composite PMI index; JPY to consolidate below 104 mark before resuming its weakening stance

¨    Australia : Retail sales growth decelerated; trade surplus widened; ACGB curve steepened

¨    Singapore: March’s PMI remained in expansion zone, no change expected at upcoming MAS meeting

¨    South Korea: BoK minutes showed unanimous vote to maintain rates at 2.5%; March's foreign reserves inched up; KRW gained

¨    Indonesia: Final auction ahead of Indonesian elections were well received; DMO to raise IDR66trn in 2Q14 (-20% q-o-q); IDR spot and NDF markets converges

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