FX & Markets Weekly. Week 40/2017. Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

Transcription

1 FX & Markets Weekly Week 40/2017 Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

2 Wall Street positions for U.S. tax cuts This week, the S&P500 marked an 8th consecutive closing high for the first time in over 20 years, as Wall Street investors have started to buy stocks of companies that currently pay the highest effective tax rates, and therefore will benefit the most from U.S. President Trump s tax plan. Typically, those sectors are energy, utility and consumer staples. This follows a rather long period since the U.S. elections in November 2016, when such sectors had underperformed the market as a tax deal failed so far. The S&P500 is up 8,25% year-to-date and 18,11% in 12- months. That is beaten by the Dow Jones (+10,22% YTD, +24,67% in 12 months) as well as the NASDAQ100 (+11,74% YTD, +24,28% in 12 months). Lira dives as Turkey inflation rises Turkey inflation accelerates to 11,2% y/y in September, up from 10,68% in August, reaching a 14-year high. Worrysome is also the acceleration of core inflation to 10,98%, up from 10,16%. Producer prices slowed only marginally to 16,28%, down from 16,34%, and remain elevated. Considering the expiry of tax cuts on e.g. white goods (from 6,7% to 0) and the VAT cut on furniture (from 18% to 8%) that were in place until September, there is still a bumpy inflation road ahead. Inflation could decelerate on a stronger base effect beginning into yearend and well into 1Q18. Week-over-week the lira depreciated against most G10 currencies, EUR/TRY touched 4,2485 intraday, and USD/TRY rose back above 3,60. Rising risk premia in Spain Market developments since the Catalan independence vote on October 1 reflect a moderate rise in the risk premium on Spanish assets. Equity prices have fallen (IB- EX35-1,71% w/w) and sovereign spreads over Germany have widened by around 15bp this week. Also CDS spreads have widened by 5bp on Monday and another 7bps during the week. Meanwhile, S&P affirmed Spain at BBB+, and maintained the stable outlook, despite market expectations for an upgrade following Portugal s upgrade on September 18, 2017.

3 Exchange Commodities Rates Energy Futures EUR/USD 1,1698-0,94-1,88 2,48 WTI crude 49,66-3,72 0,26 7,85 EUR/TRY 4,2408 0,71 3,76 2,53 BRENT crude 56,09-1,04 3,94 14,76 EUR/CHF 1,1489 0,47 0,75 4,59 GAS oil 524,00-3,18 2,49 17,06 EUR/GBP 0, ,58-1,98 1,75 Heating oil 176,81-2,10 1,48 17,75 EUR/JPY 132,46-0,30 1,81 2,41 Natural gas 2,91-3,46-5,41-2,16 EUR/RUB 67,9614-0,05-0,62-0,60 Gold Spot 1.265,66-1,08-5,05 3,46 EUR/CNY 7,7832-0,98-0,06 0,38 Silver Spot 16,58-0,40-7,13 3,79 USD/TRY 3,6251 1,69 5,77 0,14 Platinum Spot 911,55-0,03-8,97 0,34 USD/JPY 113,23 0,64 3,75-0,07 Palladium Spot 945,19 0,84 0,48 13,03 USD/RUB 58,0995 0,92 1,29-3,01 Copper 303,40 2,61-3,79 13,13 USD/CNY 6,6528 0,95 0,85-1,98 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices Bonds 10Y 10/06/ days 1 Month YTM ATX ,33 4,38 6,62 Austria 101,57-0,34-1,06 0,57 BIST ,05-5,13 3,34 Belgium 103,65-0,25-0,74 0,57 CAC ,78 5,30 4,26 China 99,84 0,09 na 3,58 DAX ,16 6,26 4,83 EFSF 115,98-0,08-0,61-0,19 Dow Jones (T-1) ,76 4,44 6,83 ESM 112,63-0,11-0,78 0,04 Euro Stoxx ,43 5,15 4,29 France 96,21-0,17-0,91 0,68 FTSE ,08 2,33 2,57 Germany 97,15-0,24-1,21 0,33 HANG SENG ,95 2,58 11,50 Greece 89,50 0,32-0,56 5,30 IBEX ,77 0,65-2,87 Japan 100,71 0,03-0,51 0,01 MICEX ,17 4,31 9,27 Portugal 105,16-0,66 2,86 2,21 NASDAQ 100 (T-1) ,09 1,78 8,20 Spain 98,34-1,09-1,41 1,49 NIKKEI ,64 6,88 3,48 Russia 104,65-0,10-0,53 7,55 S&P 500 (T-1) ,67 3,51 5,91 Switzerland 111,89-0,11-1,18-0,15 Interest Rate Price as of Change% Change % Change % Turkey 98,10-0,56-1,79 10,77 Futures UK 101,79-0,28-3,16 1,29 Bobl 131,04-0,10-0,48 1,01 US 97,03-0,39-2,17 2,37 Bund 160,71-0,17-1,13 1,98 Turkey Risk related Sentiment TRY Basket 3,9328 1,25 4,67 1,41 Baltic Dry Index (T-1) ,65 10,56 66,71 WAC of CBRT (T-1) 11,96-0,17-0,42 0,00 VIX 9,53 0,11-18,14-24,08 Gold TRY / gram 147,51 0,58 0,41 3,59 Turkey 5Y CDS (T -1) 175,151-6,59 6,77-14,36 TR Gov. B. 2Y yield 12 0,93 3,00 5,63 MSCI EM Index (T-1) 1.102,76 1,94 1,81 9,60 Euribor/Eonia USD Libor Eonia (T-1) -0,359 0,28-0,56-0,56 USD Libor O/N 1,182 0,05 0,52 0,71 Euribor 1 Month -0,373-0,27-0,54 0,00 USD Libor 1M 1,235 0,23 0,23 0,86 Euribor 3 Month -0,329 0,00 0,00 0,30 USD Libor 3M 1,350 1,23 2,51 3,54 Euribor 6 Month -0,273 0,00 0,37 0,00 USD Libor 6M 1,519 0,85 4,58 3,64 Euribor 12 Month -0,173-0,58-6,14-7,45 USD Libor 12M 1,805 1,25 5,66 2,69 EUR Libor TRY Libor EUR Libor O/N -0,436-0,26-2,11-2,45 TRY Libor O/N 12,578-0,48-0,02 0,12 EUR Libor 1M -0,405-0,35-1,07-1,43 TRY Libor 1M 12,708-0,07 0,13 0,42 EUR Libor 3M -0,376 0,79-0,84-0,38 TRY Libor 3M 12,809 0,00 0,01 0,79 EUR Libor 6M -0,309 0,00-0,51-0,51 TRY Libor 6M 12,815-0,15-0,20 0,05 EUR Libor 12M -0,223-0,77-5,84-17,30 TRY Libor 12M 12,963-0,01-0,01 0,80

4 Date Time Country Economic Release Period Consensus Actual Prior 10/02/ :45 US Markit US Manufacturing PMI Sep F /02/ :00 US ISM Manufacturing Sep /02/ :00 US ISM New Orders Sep /02/ :00 US ISM Employment Sep /04/ :15 US ADP Employment Change Sep 135k 135k 237k 10/04/ :45 US Markit US Services PMI Sep F /05/ :30 US Initial Jobless Claims Sep k 260k 272k 10/05/ :30 US Continuing Claims Sep k 1938k 1934k 10/05/ :30 US Trade Balance Aug -$42.7b -$42.4b -$43.7b 10/06/ :30 US Change in Nonfarm Payrolls Sep 80k -33k 156k 10/06/ :30 US Unemployment Rate Sep 4.4% 4.2% 4.4% 10/06/ :30 US Labor Force Participation Rate Sep 62.9% 63.1% 62.9% 10/02/ :00 EA Markit Eurozone Manufacturing PMI Sep F /02/ :00 EA Unemployment Rate Aug 9.0% 9.1% 9.1% 10/03/ :00 EA PPI MoM Aug 0.1% 0.3% 0.0% 10/03/ :00 EA PPI YoY Aug 2.3% 2.5% 2.0% 10/04/ :00 EA Markit Eurozone Services PMI Sep F /04/ :00 EA Markit Eurozone Composite PMI Sep F /04/ :00 EA Retail Sales MoM Aug 0.3% -0.5% -0.3% 10/04/ :00 EA Retail Sales YoY Aug 2.6% 1.2% 2.6% 10/05/ :10 EA Markit Eurozone Retail PMI Sep /02/ :00 RU Markit Russia PMI Mfg Sep /02/ :00 RU GDP YoY 2Q F 2.5% 2.5% 2.5% 10/02/ :40 RU Reserve Fund Sep -- $17.0b $17.1b 10/02/ :40 RU Wellbeing Fund Sep -- $72.6b $75.4b 10/04/ :00 RU Markit Russia PMI Services Sep /04/ :00 RU Markit Russia PMI Composite Sep /05/ :00 RU Gold and Forex Reserve Sep b 427.1b 10/05/ :00 RU Consumer Confidence Index 3Q /05/ :40 RU CPI MoM Sep 0.0% -0.1% -0.5% 10/05/ :40 RU CPI YoY Sep 3.1% 3.0% 3.3% 10/05/ :40 RU CPI Core MoM Sep 0.2% 0.3% 0.1% 10/05/ :40 RU CPI Core YoY Sep 2.6% 2.8% 3.0% 10/06/ :00 RU Money Supply Narrow Def Sep t 9.32t 10/02/ :00 TR Markit/ISO Turkey PMI Mfg Sep /03/ :00 TR CPI MoM Sep 0.63% 0.65% 0.52% 10/03/ :00 TR CPI YoY Sep 11.10% 11.20% 10.68% 10/03/ :00 TR CPI Core Index YoY Sep 10.50% 10.98% 10.16% 10/03/ :00 TR PPI MoM Sep 1.00% 0.24% 0.85% 10/03/ :00 TR PPI YoY Sep 16.60% 16.28% 16.34% 10/04/ :30 TR Effective Exchange Rate Sep /05/ :30 TR Foreigners Net Bond Invest Sep $15m $174m 10/05/ :30 TR Foreigners Net Stock Invest Sep $125m $71m

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.