FW: RHB FIC Rates & FX Market Update - 19/12/17

 

 

 

 

 

19 December 2017

 

 

Rates & FX Market Update

 

 

Tax Reform Bill Seem Likely Before Christmas

 

Highlights

 

¨   Global Markets: Amid thinner liquidity, the US Dollar closed -0.25% lower on Monday while Treasuries declined as equities rose boosted by optimism on the tax reform. Republicans reached an agreement and should have sufficient vote to pass the bill in the Senate.

¨   AxJ Markets: Over in Singapore, November NODX climbed 9.1% y-o-y (consensus: 6.4%; Oct: 20.5%) while electronic exports came in within expectations at 5.2%. Pace of y-o-y growth slowed given high-base effect and more restrained expansion in the electronics segment. With broader Asian prints not showing any signs of weaknesses yet, the relatively sanguine external conditions are likely to persist over the coming months, which should offer comfort to Asian investors; stay neutral SGD at current levels.

¨   In Europe, the final November CPI print remained unchanged at 1.5% YoY, somewhat underscoring the ECB's cautious approach on the inflation outlook and hence the decision to let the Asset Purchase Program run until September 2018. The EURUSD was on the rise yesterday (+0.32%), mainly on soft Dollar and we believe that the pair will remain range bound during the festive season above the clear 1.1700 support; remain neutral for now.

 

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