FX & Markets Weekly. Week 10/2018. Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

Transcription

1 FX & Markets Weekly Week 10/2018 Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

2 EUR/TRY renews record-high Monday s Turkey February inflation release surprised on the upside. Consumer prices rose in February by 10,26% vs. 10,00% consensus estimates. Core inflation slowed to 11,94%, from 12,18%, also overshooting consensus estimates (11,80%). But producer prices, increased to 13,71%, from 12,14%. On Wednesday, the Central Bank of Turkey did not change its interest rates, despite the bad inflation release with still double-digits. And Thursday followed the Moody s downgrade, driven by 2 triggers. Continued loss of institutional strength, as evidenced by further erosion in the effectiveness of monetary policy., blaming the central bank for inaction on rates. And increased risk of an external shock given wide current account deficit in the context of heightened political risk and rising global interest rates. Moody s downgraded the sovereign by 1 notch to Ba2, but upgraded the outlook to stable from negative. It was Thursday, when EUR/TRY touched 4,7440, the new all-time-high. EUR/TRY has retreated since, and is currently around 4,6888. ECB drops pledge to increase asset purchases The ECB left its interest rates unchanged amid new ECB staff projections, but dropped its pledge to increase its monthly asset purchase amount should economic conditions worsen. Partially, this has been interpreted as the ECB is going to end stimulus soon. Monthly asset purchases are going to continue at least until September 2018, at a monthly pace of EUR 30 bn. In terms of real GDP growth, ECB staff now estimates the euro area economy to grow by 2,4% this year, up from 2,3% forecast in December Forecasts for 2019 (1,9%), and 2020 (1,7%) have not been adjusted. Regarding inflation, ECB staff now forecasts 1,4% for 2019, down from 1,5% forecast in December So the dropped easing bias on QE, was neutralized by the moderate adjustment to inflation projections. Governor Draghi made also reference to global factors, FX markets, and protectionist threats as downside risks. Adding, trade disputes should be discussed multilaterally, as unilateral decisions on trade are dangerous.

3 Exchange Commodities Rates Energy Futures EUR/USD 1,2314-0,10 0,43 4,35 WTI crude 61,15-0,42 3,39 6,14 EUR/TRY 4,6957 0,04 0,29 3,95 BRENT crude 64,73 0,37 3,41 3,23 EUR/CHF 1,1705 1,28 1,63 0,17 GAS oil 574,00 1,50 3,01 2,00 EUR/GBP 0, ,54 0,17 0,53 Heating oil 188,29 0,12 1,67-1,09 EUR/JPY 131,66 1,02-1,31-1,64 Natural gas 2,73 1,45 5,28 1,33 EUR/RUB 69,8605-0,08-2,27 0,54 Gold Spot 1 320,52-0,41 0,05 5,74 EUR/CNY 7,8022-0,33 1,08-0,17 Silver Spot 16,56-0,25 0,71 4,41 USD/TRY 3,8122 0,16-0,14-0,38 Platinum Spot 955,38-1,39-1,32 6,81 USD/JPY 106,92 1,11-1,73-5,75 Palladium Spot 983,08-1,12 0,54-2,64 USD/RUB 56,731-0,02-2,69-3,65 Copper 312,85-0,35 1,98 4,04 USD/CNY 6,3359-0,15 0,52-4,27 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices Bonds 10Y 03/09/ days 1 Month YTM ATX ,60 3,65 4,48 Austria 100,83 0,13 0,67 0,64 BIST ,05 2,83 8,23 Belgium 102,74 0,15 0,54 0,65 CAC ,64 3,80-2,35 China 99,83-0,80-0,04 3,82 DAX ,56 1,90-6,21 EFSF 113,83-0,08-0,14-0,05 Dow Jones ,08 3,55 2,96 ESM 110,57-0,08 0,15 0,24 Euro Stoxx ,87 2,83-4,77 France 96,31 0,18 0,79 0,69 FTSE ,04 1,72-2,43 Germany 96,10 0,04 0,83 0,47 HANG SENG ,35 5,05 8,23 Greece 96,59 1,62-0,37 4,18 IBEX ,42 0,27-6,35 Japan 100,95 0,18 0,40-0,02 MICEX ,26 3,44 9,45 Portugal 110,42 0,89 1,42 1,53 NASDAQ ,06 9,47 10,64 Spain 101,03 0,80 0,91 1,17 NIKKEI ,36 0,40-5,88 Russia 108,54-0,24 0,59 6,94 S&P ,32 5,12 3,86 Switzerland 110,97-0,34 0,68-0,11 Interest Rate Price as of Change% Change % Change % Turkey 91,55-2,11-1,47 11,98 Futures UK 100,80-0,18 0,55 1,40 Bobl 130,25-0,08 0,43-1,74 US 93,13-0,19-0,23 2,88 Bund 156,96-0,06 1,04-2,33 Turkey Risk related Sentiment TRY Basket 4,2537 0,07-0,18 1,95 Baltic Dry Index (T-1) ,08 6,40-29,67 WAC of CBRT (T-1) 12,75 0,00 0,00 4,08 VIX 15,77-18,73-45,22 66,18 Gold TRY / gram 161,84-0,25-0,08 4,92 Turkey 5Y CDS (T -1) 169,8-2,14-7,74-8,02 TR Gov. B. 2Y yield 13,53 3,28 2,89 1,35 MSCI EM Index (T-1) 1 195,24 1,11 4,58 7,60 Euribor/Eonia USD Libor Eonia (T-1) -0,361 0,00 0,55-9,73 USD Libor O/N 1,447-0,04 0,48 22,36 Euribor 1 Month -0,371-0,27-0,27-0,54 USD Libor 1M 1,750 3,54 10,56 21,18 Euribor 3 Month -0,327 0,00 0,61-0,31 USD Libor 3M 2,089 3,14 14,77 34,86 Euribor 6 Month -0,271 0,00 2,52 0,00 USD Libor 6M 2,269 1,80 11,30 31,14 Euribor 12 Month -0,191 0,00 0,00 0,00 USD Libor 12M 2,545 1,91 9,99 26,54 EUR Libor TRY Libor EUR Libor O/N -0,442 0,00-1,08-0,78 TRY Libor O/N 13,323 0,00 0,00 3,30 EUR Libor 1M -0,411-2,24-1,52-1,52 TRY Libor 1M 13,645 0,00 0,09-1,53 EUR Libor 3M -0,379 0,00 0,75 1,99 TRY Libor 3M 13,954 0,12 0,19-2,94 EUR Libor 6M -0,330-0,18 0,77-4,33 TRY Libor 6M 14,430 0,01 0,01-0,72 EUR Libor 12M -0,259-1,40-1,80-0,95 TRY Libor 12M 14,960 0,02-0,05 0,67

4 Date Country Economic Release Period Consensus Actual Prior 03/05/ :45 US Markit US Services PMI Feb F /07/ :15 US ADP Employment Change Feb 200k 235k 234k 03/07/ :30 US Nonfarm Productivity 4Q F -0.1% 0.0% -0.1% 03/07/ :30 US Unit Labor Costs 4Q F 2.1% 2.5% 2.0% 03/07/ :30 US Trade Balance Jan -$55.0b -$56.6b -$53.1b 03/07/ :00 US Consumer Credit Jan $17.650b $13.906b $18.447b 03/08/ :30 US Initial Jobless Claims Mar 3 220k 231k 210k 03/08/ :30 US Continuing Claims Feb k 1870k 1931k 03/09/ :30 US Change in Nonfarm Payrolls Feb 205k 313k 200k 03/09/ :30 US Two-Month Payroll Net Revision Feb -- 54k -- 03/09/ :30 US Change in Private Payrolls Feb 205k 287k 196k 03/09/ :30 US Change in Manufact. Payrolls Feb 15k 31k 15k 03/09/ :30 US Unemployment Rate Feb 4.0% 4.1% 4.1% 03/09/ :30 US Labor Force Participation Rate Feb 62.7% 63.0% 62.7% 03/05/ :00 EA Markit Eurozone Services PMI Feb F /05/ :30 EA Sentix Investor Confidence Mar /05/ :00 EA Retail Sales MoM Jan -0.1% -0.1% -1.1% 03/05/ :00 EA Retail Sales YoY Jan 2.0% 2.3% 1.9% 03/06/ :10 EA Markit Eurozone Retail PMI Feb /07/ :00 EA Gross Fix Cap QoQ 4Q 1.1% 0.9% 1.1% 03/07/ :00 EA Govt Expend QoQ 4Q 0.3% 0.3% 0.2% 03/07/ :00 EA Household Cons QoQ 4Q 0.3% 0.2% 0.3% 03/07/ :00 EA GDP SA QoQ 4Q F 0.6% 0.6% 0.6% 03/07/ :00 EA GDP SA YoY 4Q F 2.7% 2.7% 2.7% 03/08/ :45 EA ECB Main Refinancing Rate Mar % 0.000% 0.000% 03/08/ :45 EA ECB Marginal Lending Facility Mar % 0.250% 0.250% 03/08/ :45 EA ECB Deposit Facility Rate Mar % % % 03/05/ :00 TR CPI MoM Feb 0.50% 0.73% 1.02% 03/05/ :00 TR CPI YoY Feb 10.00% 10.26% 10.35% 03/05/ :00 TR PPI MoM Feb % 0.99% 03/05/ :00 TR PPI YoY Feb % 12.14% 03/05/ :00 TR CPI Core Index YoY Feb 11.80% 11.94% 12.18% 03/06/ :30 TR Effective Exchange Rate Feb /07/ :00 TR Late Liquidity Lending Rate Mar % 12.75% 12.75% 03/07/ :30 TR Cash Budget Balance Feb b -1.55b 03/08/ :30 TR Foreigners Net Bond Invest Mar $107m $241m 03/08/ :30 TR Foreigners Net Stock Invest Mar $14m $149m 03/05/ :00 RU Wellbeing Fund Feb -- $66.4b $66.3b 03/06/ :00 RU CPI YoY Feb 2.3% 2.2% 2.2% 03/06/ :00 RU CPI MoM Feb 0.3% 0.2% 0.3% 03/06/ :00 RU CPI Core MoM Feb 0.2% 0.1% 0.2% 03/06/ :00 RU CPI Core YoY Feb 2.0% 1.9% 1.9% 03/07/ :00 RU Gold and Forex Reserve Mar b 450.9b 03/07/ :00 RU Official Reserve Assets Feb 456.0b 453.6b 447.7b

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 reproduction 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, Timur Kozintsev, Ruslan Abil, Alexander Vedyakhin, Pavel Barchugov, 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.