FX & Markets Weekly. Week 25/2017. Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

Transcription

1 FX & Markets Weekly Week 25/2017 Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

2 RUB drops along with crude oil This week Russian Ruble depreciated against all currencies that Bloomberg is displaying (over 3% vs. NZD, CHF, USD, CAD, and even TRY). The worst spot returns were due to several reasons. On the one hand due to declining crude oil prices. In fact, WTI touched already levels below USD 45 a barrel the other week and Brent crude followed suit this week. On the other hand, both U.S. and EU extended their sanctions against Russia. Foreign investors pulled money from the largest exchange traded fund (ETF) tracking Russian stocks (VanEck Vectors Russia ETF). Chart technically, short-term setup for crude remains bearish, in line with the impulsive decline from the May peak and the breakdown below the early-may lows. Most likely that will be also the RUB s short term destiny, unless the Central Bank of Russia changes its stance (cumulative 200bps cut to the key rate since April 2016). Just remember the emergency rate hike of 650bps to stem the Ruble s fast decline at end of BIST100 index touches 100K Borsa Istanbul closed above for the 1 st time on Thursday (100072). Opened strong on Friday (100179) and reached an intraday high of but could not hold it by the time of writing. Positive news was that rating company Fitch revised up its Turkey 2017 GDP growth forecast by 2,3ppts to 4,7% on the back of rising momentum in the economy in 1Q17 thanks to the Credit Guarantee Fund that backs lending to SMEs. Additionally a potentially smoother political environment as no elections are scheduled until November The BIST100 rose in the past month 2,18% in TRY terms and currency adjusted for EUR/TRY 4,23%. At a price/earnings ratio of 10,55 the index is still undervalued compared to EM peers. Sell-side analysts have increased their earnings estimates for the next 12 months by 11% since March. Head of the Stock Exchange Himmet Karadag said they are considering cutting the last 2 digits of the index. The last time that was done 20 years ago the index rallied 64% month-on-month. UST curve flattens as Fed delivers This week the US yield curve reached its flattest since the Presidential elections in November. Already the other week, the Federal Open Markets Committee (FOMC) of the Fed delivered its 2 nd rate hike this year and revised up its GDP growth forecast for 2017 but revised down the inflation forecast for the same time horizon. New Federal Funds Target range is 1,00-1,25% and monetary policy stance will remain accommodative. FOMC expects to begin balance sheet normalization this year by gradually reducing the Fed s securities holdings. That would happen by decreasing reinvestment of principal payments as fixed income instruments mature.

3 Exchange Commodities Rates Energy Futures EUR/USD 1,1203 0,06 0,12 3,93 WTI crude 43,03-4,58-17,03-12,23 EUR/TRY 3,9285 0,21-1,65 0,29 BRENT crude 45,56-4,03-16,45-10,97 EUR/CHF 1,0849-0,48-0,54 1,34 GAS oil 409,75-3,25-14,56-10,10 EUR/GBP 0, ,50 2,09 2,19 Heating oil 137,65-3,68-14,75-9,24 EUR/JPY 124,65 0,44-0,22 4,15 Natural gas 2,94-3,39-11,41-10,33 EUR/RUB 66,6827 3,35 5,63 7,69 Gold Spot 1.256,04 0,20 0,21 0,78 EUR/CNY 7,6594 0,49-1,03 3,19 Silver Spot 16,72 0,10-2,09-5,07 USD/TRY 3,5065 0,14-1,75-3,44 Platinum Spot 926,51-0,38-2,33-3,66 USD/JPY 111,27 0,36-0,33 0,22 Palladium Spot 866,82-0,41 11,91 8,20 USD/RUB 59,525 3,31 5,51 3,60 Copper 263,95 2,25 1,13-1,33 USD/CNY 6,8369 0,39-0,70-0,72 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices Bonds 10Y 06/23/ days 1 Month YTM ATX ,43-3,94 8,32 Austria 102,98 0,13 1,44 0,42 BIST ,47 1,96 10,99 Belgium 105,09 0,10 1,48 0,42 CAC ,13-1,71 4,45 China 99,73 0,11 0,97 3,45 DAX ,42 0,32 5,48 EFSF 117,30-0,07 0,13-0,24 Dow Jones ,09 2,23 3,62 ESM 114,02 0,01 0,59-0,08 Euro Stoxx ,27-1,69 2,38 France 97,41 0,23 2,23 0,53 FTSE ,59-0,88 1,07 Germany 98,36 0,17 1,38 0,18 HANG SENG ,17 1,05 5,52 Greece 89,45 2,11 3,20 5,26 IBEX ,33-2,75 2,82 Japan 100,67-0,01-0,02 0,02 MICEX ,62-4,56-8,79 Portugal 101,87 0,04 1,87 2,60 NASDAQ ,83 1,44 8,03 Spain 100,46 0,69 2,13 1,24 NIKKEI ,95 2,65 5,49 Russia 104,10 0,05-1,31 7,68 S&P ,10 1,55 3,82 Switzerland 113,62 0,05 0,40-0,28 Interest Rate Price as of Change% Change % Change % Turkey 102,55 0,54 1,71 10,89 Futures UK 104,59-0,22 0,30 0,97 Bobl 132,72-0,12 0,29 0,64 US 98,75-0,01 na 2,15 Bund 165,03 0,18 1,42 2,14 Turkey Risk related Sentiment TRY Basket 3,7176 0,18-1,73-1,51 Baltic Dry Index (T-1) 855 0,47-9,91-28,51 WAC of CBRT (T-1) 11,95 0,00 0,00 5,94 VIX 10,32-0,29-3,45-21,11 Gold TRY / gram 141,60 0,34-1,54-2,69 Turkey 5Y CDS (T -1) 190,89 1,41-6,60-19,19 TR Gov. B. 2Y yield 11,1 0,00-1,60-3,31 MSCI EM Index (T-1) 1.008,81 0,57 0,43 4,22 Euribor/Eonia USD Libor Eonia (T-1) -0,362-0,28-0,84-1,40 USD Libor O/N 1,177-0,05 26,45 27,06 Euribor 1 Month -0,374-0,27 0,00-0,27 USD Libor 1M 1,220 0,64 19,19 24,28 Euribor 3 Month -0,331-0,61-0,30-0,30 USD Libor 3M 1,293 1,55 8,80 12,18 Euribor 6 Month -0,273-0,74-8,77-12,81 USD Libor 6M 1,445 0,86 2,23 1,19 Euribor 12 Month -0,163-5,84-26,36-42,98 USD Libor 12M 1,733 0,06 0,81-3,90 EUR Libor TRY Libor EUR Libor O/N -0,430-1,35-1,11-1,86 TRY Libor O/N 12,583 0,24 0,98 5,59 EUR Libor 1M -0,404 0,00-0,18-1,44 TRY Libor 1M 12,650 0,00 0,99 5,21 EUR Libor 3M -0,373 0,00-0,97-4,82 TRY Libor 3M 12,708 0,00 0,87 5,07 EUR Libor 6M -0,297-0,82-7,04-20,28 TRY Libor 6M 12,767-0,10 0,83 4,69 EUR Libor 12M -0,185-3,18-27,01-68,57 TRY Libor 12M 12,835 0,00 0,20 2,16

4 Date Time Country Economic Release Period Consensus Actual Prior 06/20/ :30 US Current Account Balance 1Q -$123.8b -$116.8b -$112.4b 06/21/ :00 US MBA Mortgage Applications Jun % 2.8% 06/21/ :00 US Existing Home Sales May 5.55m 5.62m 5.57m 06/21/ :00 US Existing Home Sales MoM May -0.4% 1.1% -2.3% 06/22/ :30 US Initial Jobless Claims Jun k 241k 237k 06/22/ :30 US Continuing Claims Jun k 1944k 1935k 06/22/ :00 US FHFA House Price Index MoM Apr 0.5% 0.7% 0.6% 06/22/ :45 US Bloomberg Consumer Comfort Jun /22/ :45 US Bloomberg Economic Expectations Jun /22/ :00 US Leading Index May 0.3% 0.3% 0.3% 06/22/ :00 US Kansas City Fed Manf. Activity Jun /23/ :45 US Markit US Manufacturing PMI Jun P /23/ :45 US Markit US Services PMI Jun P /23/ :45 US Markit US Composite PMI Jun P /23/ :00 US New Home Sales May 590k 610k 569k 06/23/ :00 US New Home Sales MoM May 3.7% 2.9% -11.4% 06/19/ :00 EA Construction Output MoM Apr % -1.1% 06/19/ :00 EA Construction Output YoY Apr % 3.6% 06/20/ :00 EA ECB Current Account SA Apr b 34.1b 06/20/ :00 EA Current Account NSA Apr b 44.8b 06/22/ :00 EA Consumer Confidence Jun A /23/ :00 EA Markit Eurozone Manufacturing PMI Jun P /23/ :00 EA Markit Eurozone Services PMI Jun P /23/ :00 EA Markit Eurozone Composite PMI Jun P /22/ :00 TR Consumer Confidence Index Jun /22/ :30 TR Foreigners Net Bond Invest Jun $756m -$88m 06/22/ :30 TR Foreigners Net Stock Invest Jun $252m -$168m 06/23/ :00 TR Home Sales May k 114.4k 06/23/ :00 TR Home Sales (YoY) May % 7.6% 06/23/ :30 TR Real Sector Confidence SA Jun /23/ :30 TR Real Sector Confidence NSA Jun /23/ :30 TR Capacity Utilization Jun % 78.8% 06/19/ :00 RU PPI MoM May 0.6% -0.5% -1.5% 06/19/ :00 RU PPI YoY May 7.2% 5.9% 7.6% 06/20/ :00 RU Unemployment Rate May 5.2% 5.2% 5.3% 06/20/ :00 RU Real Disposable Income May -2.0% -0.4% -7.6% 06/20/ :00 RU Real Wages YoY May 2.4% 3.7% 2.5% 06/20/ :00 RU Retail Sales Real MoM May 1.7% 1.8% -1.3% 06/20/ :00 RU Retail Sales Real YoY May 0.5% 0.7% 0.0% 06/21/ :00 RU CPI WoW Jun % 0.1% 06/21/ :00 RU CPI Weekly YTD Jun % 1.9% 06/22/ :00 RU Gold and Forex Reserve Jun b 408.3b 06/23/ :00 RU Money Supply Narrow Def Jun t 9.12t

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.