Market Outlook 6 12 June 2016

Transcription

1 Highlight Treasury Division TMU 0 :(66) 202 TMU 02 :(66) TMU 0 :(66) 202 Market Outlook 6 2 June 206 Last Week: The US dollar dropped against major currencies on Friday (/6) after the nonfarm payrolls unexpectedly rose only 8k, the lowest in 6 years since September 200, while an unemployment rate down from 4.9% to 4.7%. In addition, the European Central Bank (ECB) kept their monetary policy unchanged as expected and, the Japanese government officially postponed their tax hike. This Week: Since there is no major data releases during the week, markets eye may look forward to FOMC meeting that will be held on June 4-5. USD The dollar index opened on Monday (0/5) at , increased from last Friday s close after the Federal Reserve Chair, Janet Yellen said on Friday (28/5) that an interest rate hike would be appropriate in the coming months if the economy keeps improving. While the economic growth was relatively weak at the end of last year and beginning of this year, it appeared to be picking up now according to the recent data which sent the index to a 2-week high of However, the dollar index slightly dropped on mixed economic data reported on Tuesday (/5). The Chicago Purchasing Management Index fell to 49. in May from 50.4 in April, and below the forecast of The U.S. May Consumer Confidence Index also fell to 92.6 from 94.2 in the previous month. The Institute for Supply Management (ISM) came out at 5. in May, rose from 50.8 in April. The dollar index remained stable on Thursday (2/6) despite a-lower than forecast ADP employment reported at 7,000 jobs in May. Furthermore, the market s major focus was on the U.S. non-farm payrolls data which reported on Friday s night (/6). The nonfarm payrolls increased by only 8,000 jobs last month, the smallest gain since September 200 while the economists had forecasted a rise of 64,000 in May. Last week, the dollar index moved between and closed on Friday (/) at

2 Graph: Dollar Index (DXY) Source: Reuter Comments: This week we do not expect the dollar index to move much higher due to poor labor market data last week. However, we still have some data to focus on; the speech from the Fed s Chair (6/6), the US wholesales inventory in April, initial jobless claims (9/6), and US Michigan consumer confidence in July (0/6)

3 EUR & GBP With a mix economic data during the week, the EUR was initially fluctuated in a narrow range. The EUR was opened (0/5) at.4/6 USD/EUR generally dropped from previous closed level at.20/2 USD/EUR. The data showed that the EU economic still need time to heal. German s consumer price inflation rose to 0.% last month from -0.4% in the preceding month. While the retail sales dropped by 0.9%mom in April. In addition, the Eurozone CPI improved to -0.% YoY in May from -0.2% in April. On Thursday (2/6) the EUR dropped after European Central Bank (ECB) President Mario Draghi warned that inflation key is likely to remain low for some time. The ECB left its headline interest rate unchanged at record low of zero. Moreover, the central bank raised its growth forecast for 206 to.6%, from.4%. The ECB also revised its inflation forecast for 206 up to 0.2% from 0.% before, but kept its inflation forecasts for 206 and 207 at.% and.6% respectively. On Friday (/) The EUR was stellar rise after the US job data report a disappointing in the Non-farm pay roll data. The EUR was closed (/6) at.65/68 USD/EUR and moved between USD/EUR. The main factor that affects the movement of the GBP was the poll of Brexit referendum on 2rd June. The Sterling opened on Monday (0/5) at.462/27 USD/GBP slightly dropped from previous closed level. The Pound was initially move in a range and fall sharply against the dollar on Wednesday (/6) as two opinion polls showed a shift among British voters towards leaving the European Union. The GBP remained under pressure during the week amid uncertainty over referendum on whether British will exit the European Union membership or not. The GBP was closed on Friday (/6) at.459/2 USD/GBP and varied between USD/GBP. Graph: EUR and GBP Daily QEUR= Cndl, QEUR=, Bid 06/06/206,.49,.7,.,.54, -0.00, (-0.0%) SMA, QEUR=, Bid(Last), 4 06/06/206,.99 27/05/206-06/06/206 (GMT) Price USD

4 Daily QGBP= Cndl, QGBP=, Bid 06/06/206,.45,.4520,.450,.444, , (-0.56%) SMA, QGBP=, Bid(Last), 4 06/06/206, /05/206-06/06/206 (GMT) Price USD Source: Reuters Comments: After the ECB kept their monetary policy unchanged, we expected the investor will be in wait and see momentum. The EUR could move in a narrow range this week with the caution in Brexit vote side effect. Whereas the GBP could slide further after polls showed that the possibility that England set to leave the EU is still considerably high. We expected the EUR to move between USD/EUR and the Pound to move between USD/GBP

5 AUD & NZD Last week, the Aussie opened on Monday (0/5) at 0.764/69 USD/AUD, slightly depreciated from Friday (27/5) at /26 USD/AUD. The Aussie was suffering from a lower company operating profit in Q. However, it gradually gained momentum for the rest of the week resulted from the robust economic data. The net exports in Q grew.%; exports grew 4.4% and imports declined for 0.8%. Moreover, the building approvals in Australia was surprisingly grown to.0% in April, forecast a.0% contraction. According to the stronger than-expected economic figures, the possibility of the benchmark rate cut at next Reserve Bank of Australia (RBA) meeting on 7th June is minimized, leading to a stronger Aussie. The Aussie moved in the range of USD/AUD and closed on Friday (0/6) at 0.724/4 USD/AUD. The Kiwi opened on Monday (0/5) at /88 USD/NZD, slightly depreciated from Friday (27/5) at 0.674/46 USD/NZD. It continuously moved up for the whole week due to the brighter economic prospects. The New Zealand building permits, in April, was significantly developed at 6.6% from 9.7% contraction in the previous month. The ANZ business confidence in May rose to. point from 6.2 point last month. The NZD moved in the range of USD/NZD last week and closed at 0.689/42 on Friday (0/06). Graph: AUD and NZD Daily QAUD= Cndl, QAUD=, Bid 06/06/206, 0.765, 0.79, 0.72, 0.757, , (-0.0%) EMA, QAUD=, Bid(Last), 4 06/06/206, /05/206-08/06/206 (GMT Price USD

6 Daily QNZD= Cndl, QNZD=, Bid 06/06/206, 0.695, , , 0.695, , (-0.56%) EMA, QNZD=, Bid(Last), 4 06/06/206, /05/206-08/06/206 (GMT Price USD Source: Reuter Comments: This week, the Aussie and the Kiwi could move fairly appreciated since the latest US nonfarm payroll was surprisingly weak. Market will be struggled to recalibrate the Fed expectations to the next rate hike. This week, investors will eye on the meeting of the Reserve Bank of Australia (RBA) on 7th June and the meeting of Reserve Bank of New Zealand (RBZ) on 9th June. The Aussie could move in the range of USD/AUD and the Kiwi could move in the range of USD/NZD

7 JPY Last week, the yen started the week (0/05) at 0.79/82 JPY/USD, slightly depreciated from the previous week s closing level (27/05) at 09.64/70 JPY/USD. The data releases had small impact on the currency movement; the April retail sales come out better than expectation at 0.8%, contraction compared to a contraction of.% in a year earlier. While the industrial production contracted by.5% compared to 0.2% last year. The Shinzo Abe administration in Japan has once again decided to postpone the consumption tax hike; it s scheduled to have kicked in next year. Electoral compulsions aside, the economy is simply not in a position to face the brunt of the hike and is unlikely to improve significantly by next year. The consumer prices are falling again despite the massive monetary stimulus and the negative interest rates. Although, the BOJ governor, Haruhiko Kuroda, rational for the rate cut as risks associated with China and the emerging markets slowdown and volatility in the global financial markets. The yen stayed flat until the end of the week and closed on Friday (0/06) at 09.0/0 JPY/USD, it varied in a range between JPY/USD. However, the yen had a dramatically appreciating against the greenback since last Friday night (0/06) a disappointing U.S. job data. Graph: JPY Daily QJPY= 27/05/206-07/06/206 Cndl, QJPY=, Bid 06/06/206, 06.4, 07.8, 06.5, 06.9, +0.42, (+0.9%) P /U Source: Reuters Comments: In Japan, Wednesday's (08/06) April current account is the main

8 release, which we expect to see a surplus of JPY2750bn whereas April machinery orders are due on Thursday (09/06). We expect the depreciation in JPY and the currency could move between JPY/USD. THB Last week the Baht opened at 5.72/74 THB/USD, depreciated from last week closing level at 5.68/70. The Baht still moved along with the region currencies all the week. The overall Thai economic data still put a lot of pressure on domestic economic as Thailand s private consumption index for April decreased 0.2% compared with March. Also, Exports data fell 7.6% in April from a year earlier after March s.0% drop while, Imports data slipped.4% in April compared to a year earlier. However, Thailand s annual headline consumer prices increased 0.46% in May from a year earlier after rising 0.07% in April while The Bank of Thailand said Thailand s monetary policy remains accommodative with the economy and expected to expand.% this year. The region currency had a support from capital inflow at the end of the week. Graph: THB Daily QTHB= 27/05/206-08/06/206 (G Cndl, QTHB=, Bid 06/06/206, 5.6, 5.42, 5.2, 5.27, -0.09, (-0.25%) Pr /U 5. Source: Reuters Comment: This week the capital will continuingly move in after Fed rate hiking expectation was fade. We expect the Baht to move in a range of THB/USD

9 FX Forecast Currency Support Resistance USD/THB USD/JPY EUR/USD GBP/USD AUD/USD NZD/USD

10 Economic Calendar Last Week Date Time Event Survey Actual Prior 0/05/206 JN Retail Trade YoY Apr -.20% -0.80% -.0% 0/05/206 JN Retail Sales MoM Apr -0.60% 0.00%.40% 0/05/206 FR GDP QoQ Q P 0.50% 0.60% 0.50% 0/05/206 FR GDP YoY Q P.0%.40%.0% 0/05/206 GE CPI MoM May P 0.0% 0.0% -0.40% 0/05/206 GE CPI YoY May P 0.0% 0.0% -0.0% /05/206 JN Jobless Rate Apr.20%.20%.20% /05/206 JN Industrial Production MoM Apr P -.50% 0.0%.80% /05/206 JN Industrial Production YoY Apr P -5.00% -.50% 0.20% /05/206 GE Retail Sales MoM Apr 0.90% -0.90% -.0% /05/206 GE Retail Sales YoY Apr.70% 2.0% 0.70% /05/206 FR CPI MoM May P 0.0% 0.40% 0.0% /05/206 FR CPI YoY May P -0.0% -0.0% -0.20% /05/206 EC CPI Core YoY May A 0.80% 0.80% 0.70% /05/206 US PCE Core MoM Apr 0.20% 0.20% 0.0% /05/206 US PCE Core YoY Apr.60%.60%.60% 0/06/206 US Markit US Manufacturing PMI May F /06/206 US ISM Manufacturing May /06/206 EC ECB Main Refinancing Rate Jun % 0.00% 0.00% 02/06/206 EC ECB Deposit Facility Rate Jun % -0.40% -0.40% 02/06/206 EC ECB Marginal Lending Facility Jun % 0.25% 0.25% 02/06/206 US ADP Employment Change May 7k 7k 56k 02/06/206 US Initial Jobless Claims May k 267k 268k 02/06/206 US Continuing Claims May-2 250k 272k 26k 0/06/206 FR Markit France Services PMI May F /06/206 GE Markit Germany Services PMI May F /06/206 EC Markit Eurozone Services PMI May F /06/206 EC Markit Eurozone Composite PMI May F /06/206 EC Retail Sales MoM Apr 0.40% 0.00% -0.50% 0/06/206 EC Retail Sales YoY Apr 2.0%.40% 2.0% 0/06/206 US Trade Balance Apr -$4.0b -$7.4b -$40.4b 0/06/206 US Change in Nonfarm Payrolls May 60k 8k 60k 0/06/206 US Change in Private Payrolls May 50k 25k 7k 0/06/206 US Change in Manufact. Payrolls May -2k -0k 4k 0/06/206 US Unemployment Rate May 4.90% 4.70% 5.00% 0/06/206 US Average Hourly Earnings MoM May 0.20% 0.20% 0.0% 0/06/206 US Average Hourly Earnings YoY May 2.50% 2.50% 2.50% 0/06/206 US Average Weekly Hours All Employees May /06/206 US Markit US Services PMI May F

11 This Week Date Time Event Survey Actual Prior 06/06/206 GE Factory Orders MoM Apr -0.50% -2.00%.90% 06/06/206 GE Factory Orders WDA YoY Apr 0.60% -0.50%.70% 06/06/206 US Labor Market Conditions Index Change May /06/206 GE Industrial Production SA MoM Apr 0.70% % 07/06/206 GE Industrial Production WDA YoY Apr.00% % 07/06/206 FR Trade Balance Apr -4450m m 07/06/206 EC GDP SA QoQ Q F 0.50% % 07/06/206 EC GDP SA YoY Q F.50% --.50% 07/06/206 US Nonfarm Productivity Q F -0.60% % 07/06/206 US Unit Labor Costs Q F 4.00% % 08/06/206 US Consumer Credit Apr $8.000b -- $29.674b 08/06/206 JN GDP SA QoQ Q F 0.50% % 08/06/206 JN GDP Annualized SA QoQ Q F.90% --.70% 08/06/206 JN GDP Nominal SA QoQ Q F 0.60% % 08/06/206 JN GDP Deflator YoY Q F 0.90% % 08/06/206 JN GDP Private Consumption QoQ Q F 0.50% % 08/06/206 JN GDP Business Spending QoQ Q F -0.40% % 08/06/206 UK Industrial Production MoM Apr 0.00% % 08/06/206 UK Industrial Production YoY Apr -0.40% % 08/06/206 UK Manufacturing Production MoM Apr 0.00% % 08/06/206 UK Manufacturing Production YoY Apr -.50% % 08/06/206 US MBA Mortgage Applications Jun % 09/06/206 FR Non-Farm Payrolls QoQ Q F 0.20% % 09/06/206 JN Machine Tool Orders YoY May P % 09/06/206 GE Trade Balance Apr 22.8b b 09/06/206 GE Current Account Balance Apr 2.0b b 09/06/206 IT Unemployment Rate Quarterly Q.60% --.50% 09/06/206 UK Trade Balance Non EU GBP/Mn Apr /06/206 UK Trade Balance Apr /06/206 US Initial Jobless Claims Jun k k 09/06/206 US Continuing Claims May-28 27k k 0/06/206 GE CPI MoM May F 0.0% % 0/06/206 GE CPI YoY May F 0.0% % 0/06/206 FR Industrial Production MoM Apr 0.40% % 0/06/206 FR Industrial Production YoY Apr.00% % 0/06/206 IT Industrial Production MoM Apr 0.0% % 0/06/206 IT Industrial Production WDA YoY Apr.0% % 0/06/206 IT Industrial Production NSA YoY Apr % 0/06/206 US U. of Mich. Sentiment Jun P