FX & Markets Weekly. Week 11/2017. Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

Transcription

1 FX & Markets Weekly Week 11/2017 Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

2 Fed hikes rates by ¼ point As expected Fed hiked its Federal Funds Target Range by 25bps to 0,75%-1,00%. Additionally FOMC members revised up their interest rate forecasts. The median Fed Funds Rate forecast (so called dot plot ) by YE2019 rose to 3%, up from 2,875% projected in December 2016 when the Fed hiked its interest rates for the first time in 7 years. The dot plot continues to show 2 more hikes at 25bps each for this year. We see upside risks to inflation if promised tax cuts happen and deficit spending increases. That would ease the Fed s hand for further rate hikes. June seems currently the most likely date. UST yields declined across the board after the decision. TCMB hikes its LLW rate by 75bps to 11,75% The Central Bank of Turkey tightened further and hiked its Late Liquidity Window rate, the current de-facto policy rate, by 75 bps to 11,75%. Also the accompanying statement was hawkish and made a reference on rising near term inflation expectations. That move will drive the weighted average cost of funding up by 40-50bps to about 11,20-11,30%. EUR/TRY opened Thursday in London trading hours at 3,96 and fell after the rate hike to 3,88. Chart-technically the next support level is around 3,7950. Also USD/TRY fell in London trading hours by almost 9 big figures. London open was around 3,69 and close around 3,61. For USD/TRY the next support level is 3,5640. In fact TRY was the strongest G20 currency this week, appreciating in 5 days against the USD by 3,73% by the time of writing. Dutch Liberals defeat Wilders Dutch voters turned out in force to back pro-european parties and help PM Mark Rutte s Liberals beat an election challenge by the anti-islam, anti-eu Freedom Party of Geert Wilders. The result draws a limit to the spreading of populism in Europe. Wednesday s vote in one of the EU s founding member countries and the eurozone s 5 th largest economy was in the international spotlight like never before. Dutch 10Y yields fell by 2 bps to 0,65%. EUR/USD climbed to its highest in more than a month. Chart-technical support is around 1,0895. Strong week for stocks Led by 4,37% week on week gains in Argentinian Merval 25 index global stock rose across the board. MSCI EM surged over 4%. Also Asia Pacific peer indices rose led by Korean Kospi (+3,20%), and Hong Kong s Hang Seng (+3,06%). Gains were also in all U.S. stock market indices with small cap indices outperforming large cap indices.

3 Exchange Commodities Rates Energy Futures EUR/USD 1,0739 0,66 1,20 2,86 WTI crude 49,01 1,03-8,91-10,21 EUR/TRY 3,8872-2,41 0,92 5,37 BRENT crude 51,98 1,13-7,41-8,47 EUR/CHF 1,0695-0,84 0,50 0,09 GAS oil 458,50-0,22-6,85-8,11 EUR/GBP 0, ,03 1,46 3,28 Heating oil 151,09 0,47-8,25-11,24 EUR/JPY 121,46-0,83 1,42-0,33 Natural gas 2,90-3,29-1,42-13,29 EUR/RUB 61,917-1,45 0,30-3,97 Gold Spot 1.230,53 2,20-0,28 7,97 EUR/CNY 7,4149 0,98 1,66 2,02 Silver Spot 17,36 1,95-3,47 8,37 USD/TRY 3,6188-3,00-0,31 2,43 Platinum Spot 959,90 1,89-4,29 4,70 USD/JPY 113,1-1,47 0,23-3,10 Palladium Spot 778,58 4,27 0,23 14,82 USD/RUB 57,6566-2,05-0,89-6,64 Copper 268,10 3,33-1,42 4,30 USD/CNY 6,9052-0,06 0,56-0,80 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices Bonds 10Y 03/17/ days 1 Month YTM ATX ,86 1,86 7,67 Austria 101,10 0,26-0,47 0,63 BIST ,77 1,66 16,39 Belgium 102,14 0,42-0,87 0,76 CAC ,76 3,37 4,10 China 95,31 0,78 0,15 3,26 DAX ,09 2,86 6,05 EFSF 117,28 0,20-0,84-0,04 Dow Jones (T-1) ,37 1,51 5,50 ESM 113,08 0,45-0,63 0,14 Euro Stoxx ,96 4,24 5,83 France 92,31 0,18-0,51 1,09 FTSE ,24 1,84 6,02 Germany 96,56 0,32-1,35 0,38 HANG SENG ,15 1,15 10,40 Greece 76,88-1,88 3,32 7,21 IBEX ,87 7,30 8,29 Japan 100,49 0,15 0,32 0,04 MICEX ,48-4,02-8,45 Portugal 91,70 0,63 0,37 3,93 NASDAQ 100 (T-1) ,90 1,64 10,12 Spain 96,01 0,26-1,16 1,74 NIKKEI ,42 1,49 0,62 Russia 102,30 1,06 1,44 7,95 S&P 500 (T-1) ,70 1,29 5,46 Switzerland 112,38 0,40-1,34-0,12 Interest Rate Price as of Change% Change % Change % Turkey 99,00 1,02-0,73 10,89 Futures UK 102,83-0,29 0,21 1,18 Bobl 131,25 0,04-0,50 0,25 US 95,58 0,57 na 2,52 Bund 159,58 0,34-1,04 0,33 Turkey Risk related Sentiment TRY Basket 3,7529-2,68 0,03 3,94 Baltic Dry Index (T-1) ,92 58,16 23,89 WAC of CBRT (T-1) 10,82 1,03 4,34 30,52 VIX 11,15-3,95-2,52-8,20 Gold TRY / gram 143,17-0,88-0,61 12,00 Turkey 5Y CDS (T -1) 227,499-3,80-5,55-19,42 TR Gov. B. 2Y yield 11,57 0,43 1,05 6,73 MSCI EM Index (T-1) 963,20 4,00 2,57 12,47 Euribor/Eonia USD Libor Eonia (T -1) -0,354-0,28 0,00 0,00 USD Libor O/N (T-1) 0,924 35,54 34,70 35,14 Euribor 1 Month -0,371 0,27 0,00 0,27 USD Libor 1M 0,976 9,61 25,23 32,09 Euribor 3 Month -0,329 0,00 0,00-4,78 USD Libor 3M 1,152 2,73 9,45 15,49 Euribor 6 Month -0,241 0,00-0,84-11,57 USD Libor 6M 1,432 0,39 5,46 8,46 Euribor 12 Month -0,109 0,00 0,00-34,57 USD Libor 12M 1,813-0,29 4,48 7,07 EUR Libor TRY Libor EUR Libor O/N -0,425-0,78-2,34-3,76 TRY Libor O/N 11,916 7,07 8,21 39,02 EUR Libor 1M -0,388 1,45 0,40-1,31 TRY Libor 1M 12,024 5,71 9,10 29,43 EUR Libor 3M -0,354 0,00-0,77-7,59 TRY Libor 3M 12,093 2,62 7,16 22,01 EUR Libor 6M -0,247-0,88-1,17-9,15 TRY Libor 6M 12,195 2,15 5,32 15,17 EUR Libor 12M -0,113-2,06-2,19-36,97 TRY Libor 12M 12,564 3,03 4,77 14,30

4 Date Time Country Economic Release Period Consensus Actual Prior 03/14/ :30 US PPI Final Demand MoM Feb 0.1% 0.3% 0.6% 03/14/ :30 US PPI Final Demand YoY Feb 1.9% 2.2% 1.6% 03/15/ :00 US MBA Mortgage Applications Mar % 3.3% 03/15/ :30 US Empire Manufacturing Mar /15/ :30 US CPI MoM Feb 0.0% 0.1% 0.6% 03/15/ :30 US CPI YoY Feb 2.7% 2.7% 2.5% 03/15/ :00 US FOMC Rate Decision (Upper Bound) Mar % 1.00% 0.75% 03/15/ :00 US FOMC Rate Decision (Lower Bound) Mar % 0.75% 0.50% 03/16/ :30 US Initial Jobless Claims Mar k 241k 243k 03/16/ :30 US Continuing Claims Mar k 2030k 2058k 03/16/ :30 US Philadelphia Fed Business Outlook Mar /16/ :45 US Bloomberg Consumer Comfort Mar /16/ :45 US Bloomberg Economic Expectations Mar /16/ :00 US JOLTS Job Openings Jan /14/ :00 EA Industrial Production SA MoM Jan 1.3% 0.9% -1.6% 03/14/ :00 EA Industrial Production WDA YoY Jan 0.9% 0.6% 2.0% 03/14/ :00 EA ZEW Survey Expectations Mar /16/ :00 EA CPI MoM Feb 0.4% 0.4% -- 03/16/ :00 EA CPI YoY Feb F 2.0% 2.0% 2.0% 03/17/ :00 EA Trade Balance SA Jan 22.0b 15.7b 24.5b 03/17/ :00 EA Trade Balance NSA Jan b 28.1b 03/17/ :00 EA Construction Output MoM Jan % -0.2% 03/17/ :00 EA Construction Output YoY Jan % 3.2% 03/13/ :00 TR Current Account Balance Jan -2.85b -2.76b -4.27b 03/15/ :00 TR Unemployment Rate Dec 12.4% 12.7% 12.1% 03/15/ :00 TR Central Gov't Budget Balance Feb b 11.43b 03/16/ :00 TR Benchmark Repurchase Rate Mar % 8.00% 8.00% 03/16/ :00 TR Overnight Lending Rate Mar % 9.25% 9.25% 03/16/ :00 TR Overnight Borrowing Rate Mar % 7.25% 7.25% 03/16/ :00 TR Late Liquidity Lending Rate Mar % 11.75% 11.00% 03/16/ :30 TR Foreigners Net Bond Invest Mar $354m -$99m 03/16/ :30 TR Foreigners Net Stock Invest Mar $94m $134m 03/14/ :00 RU Trade Balance Jan 11.6b 11.4b 11.8b 03/14/ :00 RU Exports Jan 24.6b 25.1b 31.1b 03/14/ :00 RU Imports Jan 13.5b 13.7b 19.3b 03/14/ :30 RU Budget Balance YTD Feb b b -23.4b 03/16/ :00 RU Gold and Forex Reserve Mar b 393.4b 03/17/ :18 RU PPI MoM Feb -0.5% 0.8% 3.3% 03/17/ :18 RU PPI YoY Feb 13.2% 15.1% 12.7% 03/16/ /17 RU Industrial Production YoY Feb 1.3% %

5 Should you have any queries, please contact me as follows: Mag. Ahmet Hüsrev BILGIN, Economic Research Tel: / Disclaimer: This publication was prepared by DenizBank AG exclusively for marketing purposes pursuant to section 36 (2) WAG The information contained in this report is based on the knowledge of the various authors at the time the various texts were finalised for publication. DenizBank AG reserves the right to amendments or additions in this regard at any time without prior notice. The contents of this newsletter are protected by intellectual property rights especially copyright. The use of texts, parts of texts or image material or the re-production of information or data requires the prior written consent of DenizBank AG. We have carefully checked the information in this report and have prepared it to our best knowledge and judgement. However, DenizBank AG does not assume any liability whatsoever for the accuracy, completeness or up-to-datedness of the information contained in this report and/or for the realisation of the forecasts made therein. This applies likewise for all other websites accessed via links contained within this report. The main source was the following: Bloomberg Finance LP. Every investment decision must be made in accordance with the personal circumstances of the investor. This report is intended for customers who are able to make their investment decisions independently and who do not solely rely on information provided by DenizBank AG. This report is non-binding and does not constitute an offer to purchase the products named nor is it an investment recommendation or financial analysis pursuant to section 36 (1) WAG Website credits and disclosures made in accordance with Sections 24 and 25 Media Act: Media content owner: DenizBank AG (FN t, Commercial Court of Vienna), Thomas-Klestil-Platz 1, 1030 Vienna; Registered address of the company: Vienna; DPR number: Object of the company: Banking; Members of the Management Board: Ahmet Mesut Ersoy, Mehmet Ulvi Taner, Dr. Thomas Roznovsky, Tuncay Akdevelioglu, Cenk Izgi; Members of the Supervisory Board: Hakan Ates, Derya Kumru, Wouter van Roste, Alexander Vedyakhin, Suavi Demircioglu, Dr. Kurt Heindl; Shareholder structure: Member of the Sberbank Group Purpose of document: This report summarises the significant developments within the financial markets over the previous week and comments on their underlying background.