WEEKLY INSIGHT. March 27, 2017

Transcription

1 WEEKLY INSIGHT March 27, 2017 European equity markets in consolidation mode and EUR/USD testing key resistance European financial markets consolidated near recent highs during the last week. The Eurostoxx50 index retested the support before recovering back to points (-0.1% w/w). As long as the short term support zone (3 290/3 250) holds, the index is expected to move toward 3 456, the top of its uptrend channel and 3 555, the 61.8% Fibonacci retracement from the top reached in March German Bund yields retraced to 0.4%, sustained by a less hawkish FED and by the difficulty in adopting Trump s policies in the US. This also had mildly positive effects on corporate and financial bonds. On the forex front, EUR/USD touched a high at , sustained by the above mentioned factors. Technically, the trend remains negative as long as /50 holds. Similarly, the GBP recovered to 1.25 against USD and stabilized at 0.86 against the EUR. US Markets in retreat amid Obamacare replacement failure Uncertainties over the negotiations between Trump administration and the House Rules Committee about the vote on the Obama Care replacement led US equity indices to stall from their recent highs. In fact, markets worried that the health care defeat could derail Trump's tax cuts and other pro-growth reforms. In a consolidation move, the S&P500 index dropped 1.4% last week to 2 340pts. Technology stocks also corrected with the Nasdaq composite index down 1.2% w/w to 5 830pts. On the fixed income side, the US treasury curve has shifted downward with yields on 2-year notes dropped 6bps at 1.25% and on 10-year notes felt 9bps to 2.4%. On the corporate spectrum, investment grade papers jumped on average 0.6% w/w, while high yield bonds slightly corrected last week, with the Bloomberg $ High Yield index that dropped 0.3%. Finally, the greenback depreciated for the 3 rd consecutive week against most major currencies with the dollar index down 0.7% w/w, below the 100 level. The yellow gold however, benefited from the greenback weaknesses and jumped 1.2% w/w coming back near the $1 250/oz. Asian markets pull back amid Trump s reform proposals The MSCI Asia Pacific Index had a volatile week amid concerns over whether Trump can rally sufficient support for his fiscal policies and corporate tax reforms. Japanese exports rose (+11.3% YoY) for a third consecutive month in February, outperforming consensus with the biggest increase in two years. While exports to China were strong (+28% YoY), the growth from US and EU were lackluster. In addition, the Bank of Japan left policies unchanged and stated the central bank should focus solely on achieving its 2% inflation target rather than tracking the US Federal Reserve. Home prices in China were up 11.8% YoY in February while sales grew by 25.1% in floor space triggering the Chinese authorities to launch tightening measures to cool overheated property markets in big cities that included higher down payment requirements and restrictions on second or third home purchases. MSCI is currently seeking market feedback on whether to add Chinese A shares to its emerging markets index. Equity volatility trading near a 17 year-low Over the past 17 years, realized volatility of European and US equities have rarely been below the current levels (10% for the US market and 15% for the European). Given the negative relationship between this statistic and short term return, we consider the risk of a US and European equity correction is becoming more significant. As a result, we suggest to decrease the exposure on this asset class and wait for any intermediate correction to build a new position. 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% S&P 500 volatility 6m average 0% DJ Euro stoxx volatility 6m average 0% Source: Bloomberg, CBH Sources: Bloomberg, CBH 1

2 EUROPE MSCI EUROPE % 4.4% 4.0% 15 STOXX % 4.6% 4.2% 16 STOXX 50 3' % 5.2% 4.7% 15 CAC 40 5' % 3.7% 3.3% 15 DAX 12' % 5.4% 5.1% 14 FTSE 100 7' % 3.8% 2.7% 15 IBEX 35 10' % 10.1% 10.2% 15 MIB 20' % 4.4% 5.0% 14 PSI 20 4' % 1.1% 0.2% 17 SMI 8' % 4.6% 4.8% 18 MSCI EUROPE 1W 1M 3M YTD Est. P/E Cons. Disc. -0.1% 2.0% 3.7% 3.3% 14 Cons.Staples -0.2% 1.2% 7.6% 6.8% 20 Energy -1.7% -1.2% -6.6% -7.5% 15 Financials -1.0% 3.3% 3.2% 3.6% 12 Health Care -0.8% -0.2% 5.4% 4.7% 16 Industrials 0.3% 3.2% 7.1% 6.9% 18 Inf. Technology 0.2% 3.2% 9.6% 9.4% 21 Materials -1.6% 0.7% 6.1% 4.8% 15 Telecom Serv. -0.3% 2.2% 3.5% 3.3% 17 Utility 1.8% 3.1% 4.1% 3.4% 14 Germany IFO Business Climate Mar Finland Unemployment Rate Feb [9.2%] 9.2% Italy Manufacturing Confidence Mar Eurozone Consumer Confidence Mar A Finland Consumer Confidence Index Mar [20.8] France GDP Chain Linked 2010 P 4Q F 0.4% 0.4% ECB M3 Money Supply YoY Feb % Eurozone Markit Manufacturing PMI Mar P France CPI YoY Mar P % Netherlands GDP at Real 2010 Prices 4Q F 0.5% 0.6% Germany Unemployment Change Mar K Eurozone Markit Composite PMI Mar P EU GE CH UK 2Y -0.74% 0.1% -0.3% -0.3% 10Y 0.40% 0.9% -1.6% -1.7% 2Y -0.74% -0.1% -0.3% -0.2% 10Y 0.40% 0.2% -0.8% -1.0% 2Y -0.83% -0.1% -0.4% -0.4% 10Y -0.02% 0.0% -0.6% -1.0% 2Y 0.17% -0.1% -0.1% -0.1% 10Y 1.20% 0.3% 1.9% 1.1% Corporates 1-5Y* 0.32% 0.0% -0.1% -0.1% HY IG 5-10Y* 1.15% 0.2% -0.2% -0.4% 10+Y* 1.84% 0.5% -1% -0.8% 1-5Y* 3.41% 0.0% 1.0% 0.9% 5-10Y* 3.70% 0.0% 1.8% 1.6% 10+Y* 4.35% 0.4% 3.7% 3.4% * quoted in EUR EUR vs. AUD % 2.9% 3.0% CHF % 0.3% 0.1% GBP % -1.6% -1.4% JPY % 2.0% 2.3% USD % -3.2% -2.6% BRL % 1.8% 2.2% MXN % 6.2% 7.7% NOK % -0.8% -1.0% RUB % 4.2% 5.2% SEK % 1.2% 0.7% ECB % 0.00% 0.00% 0.00% BOE % 0.25% 0.25% 0.25% SNB % -0.75% -0.75% -0.75% Euro GE FR IT ES PT UK CH GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

3 NORTH AMERICA MSCI NORTH AM. 2' % 3.6% 4.6% 18 S&P 500 2' % 3.5% 4.7% 18 DOW JONES 20' % 3.3% 4.2% 17 NASDAQ 5' % 6.7% 8.3% 22 TORONTO 15' % 0.7% 1.0% 17 MEXICAN IPC 49' % 8.7% 7.5% 18 MSCI USA 1W 1M 3M YTD Est. P/E Cons. Disc. -1.1% -0.4% 5.1% 6.5% 20 Cons.Staples -0.7% -1.0% 4.7% 5.4% 21 Energy -1.8% -2.5% -10.1% -9.0% 29 Financials -3.8% -3.6% -0.1% 1.3% 14 Health Care -1.3% -0.4% 7.1% 8.1% 16 Industrials -1.9% -1.4% 2.2% 3.5% 19 Inf. Technology -0.9% 0.7% 9.3% 11.0% 18 Materials -1.6% -1.4% 3.1% 4.4% 18 Telecom Serv. -1.8% -1.8% -4.0% -3.4% 15 Utility 1.2% 1.0% 6.1% 6.3% 18 US Conf. Board Consumer Confidence Mar US MBA Mortgage Applications Mar 17 [3.1%] -2.7% Mexico Unemployment Rate Feb % US Initial Jobless Claims Mar K 261 US Initial Jobless Claims SA Mar K US New Home Sales Feb 565.0K 592 US GDP QoQ 4Q T % Canda CPI YoY Feb 2.1% 2.0% US U. of Michigan Consumer Mar F US Durable Goods Orders Feb P 1.2% 1.7% Canada GDP MoM Jan % US Markit Manufacturing PMI Mar P US CANADA 1-3Y 1.32% 0.1% - 0.4% - 0.2% - 3-5Y 1.81% 0.3% - 0.9% - 0.4% - 5-7Y 2.13% 0.5% - 1.3% - 0.7% Y 2.36% 0.7% 1.7% 0.9% 1-3Y 0.75% 0.1% - 0.3% - 0.2% - 3-5Y 0.99% 0.3% - 0.7% - 0.4% - 5-7Y 1.22% 0.5% - 1.2% - 0.7% Y 1.55% 0.9% 1.7% 1.0% Corporates 1-5Y* 2.30% 0.3% - 1.2% - 0.9% Y* 3.43% 0.6% - 2.1% - 1.3% - 10+Y* 4.53% 1.4% 2.6% 1.4% IG HY 1-5Y* 6.16% -0.1%- 2.4% - 2.1% Y* 5.94% -0.2%- 2.1% - 1.8% - 10+Y* 7.29% 0.0% 4.9% 4.5% * quoted in USD USD vs. AUD % 6.2% 5.9% CHF % 3.5% 2.8% EUR % 3.3% 2.6% GBP % 1.5% 1.0% JPY % 5.4% 5.0% BRL % 5.2% 4.7% ILS % 5.1% 6.0% MXN % 9.9% 10.5% RUB % 7.8% 8.1% FED % 1.00% 1.15% 1.30% BOC % 0.50% 0.50% 0.50% BdeM % 6.55% 6.75% 6.95% US CA MXN GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

4 ASIA MSCI ASIA PACIFIC % 10.1% 9.7% 15 NIKKEI ' % -0.9% 0.8% 18 HANG SENG 24' % 12.9% 10.7% 12 SHANGAI 3' % 5.1% 5.3% 14 SENSEX 29' % 13.0% 10.5% 20 KOSPI 2' % 6.5% 7.0% 10 S&P/ASX 200 5' % 2.2% 1.5% 16 MSCI ASIA-PAC 1W 1M 3M YTD Est. P/E Cons. Disc. 0.0% 1.8% 5.8% 6.6% 15 Cons.Staples 0.8% 2.1% 8.9% 7.9% 21 Energy 0.8% 1.2% 10.1% 8.9% 13 Financials -1.4% 0.2% 9.8% 9.2% 11 Health Care 0.8% 1.5% 11.4% 9.0% 26 Industrials 0.4% 2.1% 8.3% 9.5% 17 Inf. Technology 0.3% 4.2% 16.9% 15.4% 16 Materials -1.0% -1.2% 9.4% 9.0% 15 Telecom Serv. -0.8% 0.3% 7.6% 7.3% 14 Utility 1.4% 2.3% 7.2% 7.4% 14 South Korea GDP Total YoY 4Q F % Japan All Industrial Activity Jan 0.0% 0.1% South Korea GDP 4Q F % Singapore CPI All Items YoY 20 Feb 0.7% 0.7% Hong Kong Retail Sales Value YoY Feb % New Zealand Trade Balance NZD Feb 180.0M -18.3M Japan Industrial Production MoM Feb P % Japan Manufacturing PMI Mar P [53.3] 52.6 Japan Unemployment Rate SA Feb % Vietnam CPI All Groups Compone Mar [5.0%] 5.0% Japan CPI Mar Singapore Industrial Production YoY Feb 10.0% 12.6% JAPAN AUSTRALIA 1-3Y -0.24% 0.0% 0.1% 0.1% 3-5Y -0.17% 0.1% 0.3% 0.2% 5-7Y -0.10% 0.1% 0.3% 0.2% 7-10Y 0.01% 0.1% 0.2% 0.0% 1-3Y 1.80% 0.2% 0.9% 0.7% 3-5Y 2.08% 0.3% 1.1% 0.7% 5-7Y 2.35% 0.5% 1.3% 0.8% 7-10Y 2.64% 0.8% 1.7% 0.8% Corporates 1-5Y* 0.12% 0.0% 0.2% 0.1% IG 5-10Y* 0.40% 0.1% 0.4% 0.2% 10+Y* 0.82% 0.2% -0.4% -0.5% * quoted in JPY USD vs. AUD % 6.2% 5.9% HKD % -0.1% -0.1% JPY % 5.4% 5.0% NZD % 2.1% 1.4% SGD % 3.4% 3.4% CNY % 0.9% 0.9% IDR 13' % 0.9% 1.1% INR % 3.7% 3.8% KRW 1' % 7.1% 7.4% MYR % 1.1% 1.4% RBA % 1.50% 1.50% 1.45% BOJ % 0.00% 0.00% 0.00% RBNZ % 1.75% 1.75% 1.75% RBIN % 6.25% 6.25% 6.25% PBOC % 4.35% 4.35% 4.35% CN JP IN AU NZ SK HK SI GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

5 EM & OTHER COUNTRIES MSCI EMERING MKT % 15.2% 12.4% 13 MSCI EM LATAM 2' % 15.7% 12.0% 14 MSCI EAST EUROPE % 4.8% 1.7% 8 MSCI SOUTH AFRICA 1' % 6.7% 3.1% 18 TEL AVIV 25 1' % -3.2% -3.7% 12 RUSSIAN RTS 1' % 0.6% -2.4% 6 FTSE/JSE AFRICA 44' % 4.2% 1.7% 15 IBOVSPA BRAZIL 63' % 10.2% 6.0% 12 MSCI EM 1W 1M 3M YTD Est. P/E Cons. Disc. 1.5% 3.8% 18.0% 14.8% 17 Cons.Staples 0.1% 1.9% 11.6% 8.3% 21 Energy 1.2% 0.1% 6.4% 3.7% 9 Financials 0.0% 1.8% 15.1% 11.9% 10 Health Care 0.4% 0.9% 11.0% 7.5% 24 Industrials 0.9% 4.7% 16.2% 14.3% 15 Inf. Technology 0.4% 4.8% 19.4% 17.3% 14 Materials -1.1% -0.8% 14.1% 11.7% 13 Telecom Serv. 0.2% 3.5% 11.6% 8.7% 16 Utility 0.4% 2.3% 13.1% 10.6% 11 Brazil Retail Sales YoY Jan % Russia Unemployment Rate Feb 5.6% 5.6% Brazil FGV Inflation IGPM MoM Mar % Russia Retail Sales Real YoY Feb -2.0% -2.6% Argentina Industrial Production YoY Feb % Argentina GDP YoY 4Q -1.9% -2.1% Chile Copper Production Total Feb [ K] Brazil IBGE Inflation IPCA-15 MoM Mar 0.2% 0.2% Russia Current Acccount Balance 4Q F [7800.0M] South Africa CPI YoY Feb 6.3% 6.3% Chile Unemployment Rate Feb % Brazil Current Account MoM Feb 300.0M M IL 2Y 0.40% 0.1% 0.4% 0.2% 10Y 2.36% -0.1% 0.9% 0.6% BZ 2Y 9.47% 0.2% 5.2% 4.9% 10Y 10.09% 0% 5% 4% USD vs. ARS % -0.7% 1.8% BRL % 5.2% 4.7% RU 2Y 8.36% -0.1% 0.1% -0.1% 10Y 8.09% -0.1% 3.0% 2.5% CL 2Y 3.55% 0.2% -0.6% 1.2% 10Y 4.11% 1.1% 0.8% 0.1% CLP % 2.1% 1.5% ILS % 5.1% 6.0% RUB % 7.8% 8.1% SA 2Y 7.38% 0.3% 3.3% 3.0% 10Y 8.36% 1.0% - - ZAR % 12.6% 10.5% BOI % 0.10% 0.10% 0.10% BCB % 12.25% 10.50% 9.30% BCCE % 3.00% 2.80% 2.80% CBR % 9.80% 9.40% 8.85% SARB % 7.00% 7.00% 6.95% IL RU SA BZ AR CL GDP (% change Y/Y) GDP (% change Q/Q) Inflation rate (Y/Y) Unemployment rate (%) Debt (as % of GDP)

6 COMMODITIES LAST LAST 6M 1W 3M YTD COMMODITY INDEX % -2.0% -3.4% PRECIOUS METALS 1' % 10.9% 9.1% GOLD ($/oz.) 1' % 9.7% 8.4% SILVER ($/oz.) % 12.8% 11.5% PLATINUM ($/t oz.) % 8.1% 6.8% ENERGY % -13.6% -15.0% WTI CRUDE ($/bbl.) % -13.2% -14.4% BRENT CRUDE ($/bbl.) % -10.9% -12.5% NATURAL GAS ($/MMBtu) 3 4.3% -12.0% -13.7% INDUSTRIAL METALS % 6.4% 6.9% STEEL ($/T.) % 10.8% 2.4% ALUMINUM ($/mt) 1' % 12.4% 14.2% COPPER ($/lb.) % 5.8% 4.7% SOFT COMMODITIES % 1.0% -3.1% CORN ($/bu.) % 1.1% -0.3% WHEAT ($/bu.) % 4.4% 1.0% GOLD $/oz Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 WTI CRUDE OIL $/bbl Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar IMPRINT Publication date : All data as of : Disclaimer This publication has been prepared on behalf of CBH Compagnie Bancaire Helvétique SA. It is not investment advice or an offer or solicitation for the purchase or sale of any financial instrument. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, CBH Compagnie Bancaire Helvétique SA makes no representation that it is accurate or complete. The information contained herein is subject to change without notice. The views expressed in this report accurately reflect the personal views of the economist(s), analyst(s), trading adviser(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this report. Neither CBH Compagnie Bancaire Helvétique SA nor any of its officers or employees accepts any liability for any direct or consequential loss arising from any use of this publication or its contents. CBH Compagnie Bancaire Helvétique SA and any of its officers, employees, related and discretionary accounts may, to the extent not disclosed above and to the extent permitted by law, have long or short positions or may otherwise be interested in any transactions or investments (including derivatives) referred to in this publication. In addition, CBH Compagnie Bancaire Helvétique SA may provide banking, insurance or asset management services for, or solicit such business from, any company referred to this publication. Any investments referred to herein may involve significant risk, are not necessarily available in all jurisdictions, may be illiquid and may not be suitable for all investors. The value of, or income from, any investments referred to herein may fluctuate and/or be affected by changes in exchange rates. Past performance is not indicative of future result. Investors should make their own investment decisions without relying on this publication. Only investors with sufficient knowledge and experience in financial matters to evaluate the merits and risks should consider an investment in any recommendation, issue or market discussed herein and other persons should not take any action on the basis of this publication. The Bank s recommendations are based on its exclusive use of secondary analysis starting generally with investment grade securities, which are then screened according to various criteria. Copyright and database rights protection exists in this publication and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of CBH Compagnie Bancaire Helvétique SA. All rights are reserved. 6