MARKET OUTLOOK & SUMMARY REPORT

Transcription

1 MARKET OUTLOOK & SUMMARY REPORT Summary: 5 th AUGUST 9 th AUGUST 2013 Outlook: 12 th AUGUST 16 th AUGUST 2013 MARKET SUMMARY FOR LAST WEEK (5 th AUGUST 9 th AUGUST 2013) U.S. Stocks Have Worst Week Since June Amid Fed Concern U.S. stocks fell for the week, with benchmark indexes posting the worst losses since June, as betterthan-estimated data on trade and service industries fueled concern the Federal Reserve may reduce its stimulus. The Standard & Poor s 500 Index dropped 1.1 percent to 1, The Dow Jones Industrial Average slid points, or 1.5 percent, to 15, Both gauges capped their worst week since June 21 after closing at records on Aug. 2. The weekly drop in stocks came after the S&P 500 s valuations jumped to their highest levels in more than three years. The benchmark index trades at 15.3 projected earnings, up from a multiple of 13.1 at the beginning of this year, data compiled by Bloomberg show. Speculation that the Fed will pare bond purchases in September as the economy strengthens has whipsawed the market. The S&P 500 sank as much as 5.8 percent over the five weeks ended June 24, before recovering all the losses to hit an all-time high on Aug. 2. Singapore Lifts Economic Forecast as Recovery Strengthens Singapore s Prime Minister Lee Hsien Loong raised his forecast for economic growth to a range of 2.5 percent to 3.5 percent this year, a sign that Southeast Asia is benefiting from recoveries in the advanced economies. The government previously predicted growth of 1 percent to 3 percent. The economy expanded 2 percent in the first half, Lee said in a televised message yesterday on the eve of the country s National Day. In 2012, gross domestic product grew 1.3 percent, the slowest pace in three years. Singapore s GDP probably expanded 14.2 percent in the three months through June 30, according to the median estimate of 11 economists surveyed by Bloomberg News ahead of data due Aug. 12. Initial government figures released last month showed a 15.2 percent increase, the biggest gain since 2011.

2 SNB s Danthine Says Rate Increase Would Mean End of Cap The Swiss National Bank (SNBN) will abolish its franc ceiling once it starts raising interest rates, Vice President Jean-Pierre Danthine said. The day the SNB decides to raise rates, there can no longer be a restricting minimum exchange rate, Danthine said in an interview published today in Le Matin Dimanche and SonntagsZeitung newspapers. Today the absolute priority is the cap, which we will keep in place as long as necessary. The central bank won t raise rates this year or next, according the the median estimate of economists in Bloomberg s month economic survey published Aug. 9. Swiss house and apartment prices have soared in recent years, with mortgages kept cheap by the SNB s loose policy. The SNB has repeatedly warned of overheating, and the government is requiring banks to hold more capital as a buffer, to guard against rising defaults. Italian Bonds Advance With Spain s as Reports Signal Recovery Italian and Spanish government bonds rose for a fourth week, the longest streak since May, after an improvement in euro-area services output and German factory orders spurred demand for the region s higher-yielding assets. Italy s 10-year yield dropped to the lowest in eight weeks, narrowing the spread versus German securities, as separate data showed the nation s recession eased in the second quarter. Greek bonds advanced for a fifth week. German bunds declined as signs the euro area is recovering from a record-long recession damped demand for the region s safest assets. Trading volumes declined as investors awaited the next Federal Reserve policy meeting and Germany s federal election. Dollar Falls Most in Four Weeks on Global Recovery Signs The dollar fell the most in four weeks amid signs that recoveries from Germany to the U.K. are strengthening, narrowing the gap between growth in the world s largest economy and those of other developed countries. The euro gained 0.5 percent versus the greenback during the week as industrial production in Germany, Europe s largest economy, rose in June. The pound rallied against 12 of its 16 most-traded peers as U.K. exports rose to a record. The Labor Department may report Aug. 15 that the consumerprice index increased 0.2 percent in July, according to a Bloomberg survey, as traders weigh whether economic gains will be enough for the Federal Reserve to reduce stimulus measures next month. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major peers, fell 1.2 percent this week in New York to 1,016.93, the biggest drop since the period that ended July 12. The dollar depreciated 2.8 percent to yen, the biggest drop since the week that ended June 14. The U.S. currency rose 0.3 percent to $ per euro. The 17-nation shared currency fell 2.3 percent to yen.

3 KEY EVENTS LAST WEEK (5 th AUGUST 9 th AUGUST 2013) Currency Event Actual Forecast AUD Retail Sales m/m 0.00% 0.40% GBP Services PMI USD ISM Non-Manufacturing PMI AUD Trade Balance 0.60B 0.81B AUD Cash Rate 2.50% 2.50% AUD RBA Rate Statement - - GBP Manufacturing Production m/m 1.90% 0.90% CAD Trade Balance -0.5B -0.5B USD Trade Balance -34.2B -43.1B NZD Employment Change q/q 0.40% 0.40% NZD Unemployment Rate 6.40% 6.30% CHF CPI m/m -0.40% -0.30% GBP BOE Gov Carney Speaks - - GBP BOE Inflation Report - - CAD Building Permits m/m % -2.50% CAD Ivey PMI JPY Current Account 0.65T 0.73T AUD Employment Change -10.2K 6.2K AUD Unemployment Rate 5.70% 5.80% JPY Monetary Policy Statement - - CNY Trade Balance 17.8B 26.2B JPY BOJ Press Conference - - USD Unemployment Claims 333K 336K AUD RBA Monetary Policy Statement - - CNY CPI y/y 2.70% 2.80% CAD Employment Change -39.4K 6.2K CAD Unemployment Rate 7.20% 7.10%

4 KEY EVENTS THIS WEEK (12 th AUGUST 16 th AUGUST 2013) Currency Event Singapore Time (+8GMT) Importance JPY Prelim GDP q/q 7:50am Mon High GBP CPI y/y 4:30pm Tue High EUR German ZEW Economic Sentiment 5:00pm Tue High USD Core Retail Sales m/m 8:30pm Tue High USD Retail Sales m/m 8:30pm Tue High NZD Retail Sales q/q 6:45am Wed High GBP Claimant Count Change 4:30pm Wed High GBP MPC Asset Purchase Facility Votes 4:30pm Wed High GBP MPC Official Bank Rate Votes 4:30pm Wed High USD PPI m/m 8:30pm Wed High GBP Retail Sales m/m 4:30pm Thur High USD Core CPI m/m 8:30pm Thur High USD Unemployment Claims 8:30pm Thur High USD Philly Fed Manufacturing Index 10:00pm Thur High CAD Manufacturing Sales m/m 8:30pm Fri High USD Building Permits 8:30pm Fri High USD Prelim UoM Consumer Sentiment 9:55pm Fri High

5 SGX COMPANY EARNINGS RELEASE (CONFIRMED) Company Fraser and Neave Ho Bee Investment Hotel Royal Mewah International QAF Super Group Superbowl Holdings Amara Holdings Aspial Corporation Best World International Cityspring Infrastructure Trust CSE Global HTL International Holdings Megachem SBS Transit Singapore Technologies Engineering Tat Hong Holdings Venture Corporation WBL Corporation Armstrong Industrial Corporation ComfortDelGro Corporation Global Logistic Properties Haw Par Corporation Indofood Agri Resources Midas Holdings Singapore Telecommunications Sinjia Land Swiber Holdings United Engineers Date Data as at 11/8/13

6 THIS WEEK s TECHNICAL ANALYSIS (TA) TRADE IDEAS FX PAIR: GBPJPY (Long) Current Price: Suggested Take Profit: Suggested Stop Loss: NUS Invest Analyst Pham Minh Tri On the H4 chart, price is on a uptrend and is now testing trend line. If this trend line holds, the current uptrend will continue and provide a good opportunity to enter. This is likely the case, as a bullish divergence was observed when price created a lower low while MACD formed a higher low. Thus, we suggest to long the pair, but only after price successfully re-bounces from the trend line and subsequently rejects the recent resistance at Potential entry price should be above this price level, to confirm a genuine break out. Stop loss should be placed below , the nearest support level. For target level, we suggest taking partial profits at and subsequently at 160, a strong psychological resistance. Coincidentally, 160 is also near the Fibonacci expansion level. Overall, this is a high-percentage trade with a moderate reward-to-risk ratio. GBPJPY H4 Chart

7 FX PAIR: USDCAD (Long) Current Price: Suggested Take Profit: Suggested Stop Loss: NUS Invest Analyst Samuel Bay On the weekly chart, USDCAD is pulling back into a demand level formed by a drop-base-rally pattern. This signals a potential long for the pair. However, the stop-loss may be too wide for most short term traders hence a look into the H4 chart is required to lower the risks. USDCAD Weekly Chart

8 The following H4 chart shows another drop-base-rally demand level within the weekly demand level. Potential trade strategy would be to wait for a confirmation as prices enter the shaded area, forms a new demand level, then initiate a long position on pullback as depicted by the white arrow. Stop loss at levels below the H4 demand shaded area; take profit at 2x width of the stop level. USDCAD H4 Chart

9 Instrument SUMMARY OF TRADES TO DATE Entry (L/S)* Target Stop Analysis By Date of Analysis EURAUD (FX) L / Andrew 29/6/13 EURUSD (FX) S Ivan 29/6/13 Oracle:NASDAQ (Equity) S Samuel 29/6/13 Venture:SGX (Equity) S $7.00 $7.32 Samuel 7/7/13 EURUSD (FX) S / Ivan 7/7/13 USDJPY (FX) S 98.05/ Andrew 14/7/13 EURAUD (FX) L Samuel 14/7/13 EURUSD (FX) S Ivan 21/7/13 AUDJPY (FX) L 99.70/ Samuel 21/7/13 CADCHF (FX) S Tri 27/7/13 GBPUSD (FX) S / Andrew 28/7/13 USDJPY (FX) S Jonathan 3/8/13 Vard Holdings (Equity) L Samuel 3/8/13 GBPJPY (FX) L / Tri 11/8/13 USDCAD (FX) L Samuel 11/8/13 *L/S Denotes Long/Short Entries

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