FX & Markets Weekly. Week 39/2018. Mag. Ahmet Hüsrev BILGIN Chief Economist Vienna, Austria

Transcription

1 FX & Markets Weekly Week 39/2018 Mag. Ahmet Hüsrev BILGIN Chief Economist Vienna, Austria

2 Fed hikes rates by ¼ point The Federal Open Markets Committee (FOMC) raised the Federal Funds Target Range, as widely expected by 25 basis points to 2-2,25%. As a result, the EUR/USD exchange rate experienced a pretty volatile Thursday, opening at 1,1752, touching 1,1798, but retreating to 1,1663 at the close. Remember, only last week EUR/USD was testing 1,18. Changes to the post-meeting statement were minimal but slightly dovish. In terms of macroeconomic projections, the GDP growth projection for this year, rose by three tenth to 3,1%. The path of the unemployment rate was revised up by one tenth, and the inflation projection for 2019 edged down by one tenth to 2,0%. The next 25 bps hike will most likely be on December 19, Lira outperforms after rate hike This week, the lira outperformed every G10 currency by at least 4,5% (by the time of writing), every EMEA currency by at least 3,5%, as well as every EM currency by at least 3,5%. Basically, the lira s spot performance was even better than the metals Palladium, Silver, and Platinum. From a macroeconomic perspective, incoming data was in line with our estimates. The trade deficit continues to decline (-59% y/y in August). That will most likely even lead to a monthly current account surplus. Turkey s country risk premium, as measured by 5-year USD credit default swaps has declined since peaking on September 4 at 574 to 365 this week. At the same time, Turkey s borrowing costs, the sovereign yields, continued to decline. 2-year government bonds denominated in TRY are currently yielding 24,38%, down from 25,96% (1-month high), 5-year sovereigns are currently yielding 20,79%, down from 24,44%, and 10- year securities are currently yielding 17,18%, down from 20,39%. As for sovereign bonds denominated in USD, 10Y yields declined to 7,24%, down from 8,99%, and 3Y yields dropped to 6,26%, down from 9,35%. In terms of stocks, BIST 100 index gained 2,35%. Among the sub-indices, the BIST banks index rose by almost 10%. At the same time, the additional yield, or spread, investors demand to hold debt issued by Turkish banks instead of the government bonds with a comparable maturity, has fallen sharply from August s record levels.

3 Exchange Commodities Rates Energy Futures EUR/USD 1,1585-1,38-1,12 0,03 WTI crude 72,11 1,89 5,72 3,75 EUR/TRY 6,9627-5,78-5,40 30,84 BRENT crude 82,23 4,35 7,79 6,72 EUR/CHF 1,1312 0,46-0,96-2,05 GAS oil 715,75 3,96 4,84 7,11 EUR/GBP 0, ,98-2,18 0,54 Heating oil 232,45 4,41 4,84 6,07 EUR/JPY 131,44-0,65 0,98 2,83 Natural gas 2,99 0,71 4,25 0,94 EUR/RUB 76,1269-2,53-4,13 4,44 Gold Spot 1 186,10-1,12-1,76-5,08 EUR/CNY 7,9711-1,05 0,02 3,81 Silver Spot 14,53 1,57-2,17-9,14 USD/TRY 6,0067-4,47-4,29 30,87 Platinum Spot 816,70-1,41 2,63-3,87 USD/JPY 113,46 0,75 2,12 2,80 Palladium Spot 1 093,50 3,92 15,78 16,65 USD/RUB 65,7166-1,13-3,05 4,39 Copper 279,95-2,12 1,40-6,56 USD/CNY 6,8765 0,29 1,09 3,78 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices Bonds 10Y 09/28/ days 1 Month YTM ATX ,78 0,39 2,99 Austria 102,08-0,12-0,56 0,48 BIST ,33 5,78 3,19 Belgium 103,41-0,31-0,86 0,54 CAC ,30-0,14 3,83 China 93,24 0,32-0,12 3,55 DAX ,73-2,49 0,32 EFSF 112,26-0,18-0,53-0,17 Dow Jones ,81 1,44 9,18 ESM 110,19-0,19-0,62 0,11 Euro Stoxx ,18-1,66 0,73 France 97,83-0,21-0,69 0,52 FTSE ,18-1,49-1,47 Germany 98,19-0,06-0,68 0,23 HANG SENG ,13-1,99-2,49 Greece 98,06 0,18 0,03 4,12 IBEX ,43-2,59-2,41 Japan 100,38 0,01-0,26 0,04 MOEX ,48 6,32 9,44 Portugal 109,49-0,22-0,36 1,57 NASDAQ ,80 0,78 8,50 Spain 100,59-0,25-0,55 1,22 NIKKEI ,88 5,73 8,31 Russia 98,94 1,17 0,71 8,50 S&P ,57 0,57 7,28 Switzerland 110,69-0,23-0,89-0,16 Interest Rate Price as of Change% Change % Change % Turkey 78,00 4,36 17,80 17,18 Futures UK 101,05 0,02-0,80 1,36 Bobl 130,78-0,07-0,42-0,48 US 92,66 0,25-1,09 3,02 Bund 159,07 0,06-0,56-0,52 Turkey Risk related Sentiment TRY Basket 6,4841-4,87-4,87 30,81 Baltic Dry Index ,86-9,50 14,67 WAC of CBRT (T-2) 24,08 0,33 25,09 35,66 VIX 12,89 10,87 3,60-23,15 Gold TRY / gram 229,05-5,54-5,97 24,22 Turkey 5Y CDS (T-1) 371,611-7,30-23,40 22,44 TR Gov. B. 2Y yield 25,82 1,65 5,47 35,40 MSCI EM Index (T-1) 1 051,30-0,01-1,80 0,44 Euribor/Eonia USD Libor Eonia (T-1) -0,365 0,27-0,55 0,82 USD Libor O/N 2,171 13,04 13,40 12,32 Euribor 1 Month -0,371 0,00 0,00 0,00 USD Libor 1M 2,261 2,02 8,95 8,05 Euribor 3 Month -0,318 0,31 0,31 1,85 USD Libor 3M 2,398 1,09 3,61 2,61 Euribor 6 Month -0,268 0,00-0,75 0,74 USD Libor 6M 2,604 0,46 2,99 4,10 Euribor 12 Month -0,159 5,36 4,22 12,16 USD Libor 12M 2,919 0,36 3,20 5,63 EUR Libor TRY Libor EUR Libor O/N -0,448 0,06-1,32-2,25 TRY Libor O/N 25,200 0,90 30,86 36,45 EUR Libor 1M -0,402 0,42-1,48-1,62 TRY Libor 1M 27,300 6,91 25,51 43,78 EUR Libor 3M -0,353-0,12 2,18 2,91 TRY Libor 3M 27,961 5,74 19,94 45,10 EUR Libor 6M -0,314 0,72-1,29 1,52 TRY Libor 6M 28,150 6,00 12,16 42,11 EUR Libor 12M -0,213 2,29 2,10 8,23 TRY Libor 12M 28,975 4,18 11,15 41,71

4 Date Country Economic Release Period Consensus Actual Prior 09/24/ :30 US Chicago Fed Nat Activity Index Aug /24/ :30 US Dallas Fed Manf. Activity Sep /25/ :00 US FHFA House Price Index MoM Jul 0.3% 0.2% 0.2% 09/25/ :00 US Richmond Fed Manufact. Index Sep /25/ :00 US Conf. Board Consumer Confidence Sep /25/ :00 US Conf. Board Present Situation Sep /25/ :00 US Conf. Board Expectations Sep /26/ :00 US MBA Mortgage Applications Sep % 1.6% 09/26/ :00 US New Home Sales Aug 630k 629k 627k 09/26/ :00 US New Home Sales MoM Aug 0.5% 3.5% -1.7% 09/26/ :00 US FOMC Rate Decision (Upper Bound) Sep % 2.25% 2.00% 09/26/ :00 US FOMC Rate Decision (Lower Bound) Sep % 2.00% 1.75% 09/26/ :00 US Interest Rate on Excess Reserves Sep % 1.95% 09/27/ :30 US Advance Goods Trade Balance Aug -$70.6b -$75.8b -$72.2b 09/27/ :30 US Wholesale Inventories MoM Aug P 0.3% 0.8% 0.6% 09/27/ :30 US Retail Inventories MoM Aug % 0.4% 09/27/ :30 US GDP Annualized QoQ 2Q T 4.2% 4.2% 4.2% 09/27/ :30 US Personal Consumption 2Q T 3.8% 3.8% 3.8% 09/27/ :30 US Initial Jobless Claims Sep k 214k 201k 09/27/ :30 US Continuing Claims Sep k 1661k 1645k 09/27/ :45 US Bloomberg Consumer Comfort Sep /27/ :00 US Kansas City Fed Manf. Activity Sep /27/ :00 EA M3 Money Supply YoY Aug 3.9% 3.5% 4.0% 09/27/ :00 EA Economic Confidence Sep /27/ :00 EA Business Climate Indicator Sep /27/ :00 EA Industrial Confidence Sep /27/ :00 EA Services Confidence Sep /27/ :00 EA Consumer Confidence Sep F /28/ :00 EA CPI Core YoY Sep A 1.1% 0.9% 1.0% 09/28/ :00 EA CPI Estimate YoY Sep 2.1% 2.1% 2.0% 09/24/ :30 TR Real Sector Confidence SA Sep /24/ :30 TR Real Sector Confidence NSA Sep /24/ :30 TR Capacity Utilization Sep % 77.8% 09/27/ :00 TR Economic Confidence Sep /27/ :30 TR Foreigners Net Bond Invest Sep $118m -$96m 09/27/ :30 TR Foreigners Net Stock Invest Spe $138m -$60m 09/28/ :00 TR Trade Balance Aug -2.50b -2.42b -5.98b 09/28/ :00 TR Foreign Tourist Arrivals YoY Aug % 11.7% 09/26/ :00 RU CPI WoW Sep % 0.0% 09/26/ :00 RU CPI Weekly YTD Sep % 2.4% 09/27/ :00 RU Gold and Forex Reserve Sep b 460.9b 09/28/ :00 RU Money Supply Narrow Def Sep t 10.46t 09/28/ :00 RU Current Account Balance 2Q F m 22300m

5 Should you have any queries, please contact me as follows: Mag. Ahmet Hüsrev BILGIN, Chief Economist, DenizBank AG Tel: / Disclaimer: This publication was prepared by DenizBank AG exclusively for marketing purposes as a marketing communication pursuant to Article 36 paragraph 2 of the Commission Delegated Regulation (EU) 2017/565 of 25 April 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/sell the products named nor is it an investment research pursuant to Article 36 paragraph 1 of the Commission Delegated Regulation (EU) 2017/565 of 25 April 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, Tuncay Akdevelioglu, Cenk Izgi; Members of the Supervisory Board: Hakan Ates, Derya Kumru, Wouter van Roste, Timur Kozintsev, Ruslan Abil, Alexander Vedyakhin, Pavel Barchugov, Hayri Cansever; 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.