Global daily insight 19 june 2015

Page 1

Daily Insight Euro Crisis Summit

Group Economics Macro & Financial Markets Research Nick Kounis, Aline Schuiling & Maritza Cabezas, +31 20 343 5616 ,

19 June 2015   

Greek crisis Summit on Monday, while Eurogroup to be scheduled before that Eurozone banks took up EUR 74bn in the ECB’s fourth TLTRO Higher energy prices, lift US consumer prices, while a stronger dollar pushes down core prices

Europe to increase efforts to reach Greece deal

EZ bank lending to private sector rises

Thursday’s Eurogroup made little progress towards a deal on Greece, though there will now be an emergency Euro Summit on Monday. In addition, a Eurogroup meeting will be planned before then, in order to lay the groundwork for a deal. All this

EUR bn

30 20

shows that despite the heated rhetoric a strong push is being

10

made to reach an agreement before the end of the month,

0

when IMF payments fall due. The pressure to reach a deal was

-10

also underlined by reports that in the first four days of this week, Greek deposit outflows accelerated to EUR 3bn. Apparently the Bank of Greece will request an increase in the ELA limit today.

-20 Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Monthly flow in bank loans to households and non-financial corporations, adjusted for sales and securitization Source: Thomson Reuters Datastream

Fourth ECB TLTRO sees high demand again … The ECB allotted EUR 73.8bn in its fourth TLTRO, following EUR 97.8bn in the third operation in March. As in the first three TLTROs, it was mainly Spanish and Italian banks that took up the loans. In the four TLTROs that have been allotted so far, banks have borrowed a total amount of EUR 385bn, which is equal to almost 4% of eurozone GDP. The borrowing allowance of the first two TLTROs (in Sep and Dec 2014) was based on the outstanding amounts of bank loans to nonfinancial corporations and households (ex. mortgages) at the end of April 2014. In contrast, the allowance for the third and fourth operations was based on the increase in lending

US consumer prices rise in May

US headline consumer prices recorded the largest increase in two years in May, rising 0.4%, up from 0.1% the previous month, boosted by a 4.3% increase in energy prices. The core CPI showed some softness, rising just 0.1%, down from 0.3% in April. Mainly apparel and used cars declined in May. Import prices for non-oil imports continue to fall and this could be pushing down core inflation a bit. This impact should diminish in time. Compared to a year earlier, prices were unchanged, while core CPI was up 1.7%.

between the end of April 2014 and the reference month of the relevant TLTRO, versus a certain threshold. Therefore, the positive take-up in TLTROs 3-4 indicates that bank lending to the private sector is picking up.

Fed remains confident about inflation reaching 2% target We don’t think that the somewhat weaker core CPI will change the view of the Fed on a rate hike, as early as September. Wednesday’s FOMC press statement suggests the Fed

… as bank lending increases Indeed, ECB data shows that the monthly flow in loans to households and non-financial corporations (adjusted for sales

remains confident that inflation will gradually move to its 2% target and that it does not have to wait for inflation to reach this target to hike rates.

and securitization) turned positive in August 2014, after having contracted almost non-stop during the previous two years. It has accelerated markedly since the start of this year. In April, the monthly flow came out at EUR 15bn, up from EUR 9bn in March. This rise in bank lending has also been signalled by the last couple of quarterly ECB Bank Lending Surveys, which have shown that banks are easing lending conditions, while demand for bank loans is rising.

US labour market remains solid Meanwhile, initial jobless claims declined to 267k in the week ended June 13 from 279K last week. This is the week which the government surveys employers for the June nonfarm payrolls, suggesting that this job report will be strong.


2

Euro Crisis Summit – 19 June 2015

Financial markets Currency markets

Close

Change 1 day

Change 5 days

Change YTD

EUR/USD USD/JPY

1.1372

0.1144

0.9409

123.03

0.0569

-0.2918

-6.0010 2.7133

AUD/USD

0.7784

-0.2051

0.6856

-4.7829

USD/CHF

0.9212

-0.0542

-0.8183

-7.3519

NZD/USD

0.6917

-0.1444

-0.9593

-11.2864

GBP/USD

1.5881

0.0063

2.0564

1.9516

USD/SGD

1.3345

0.0225

-0.6921

0.6790

USD/CAD

Bond markets

1.2231

Close

0.0736

Change 1 day

-0.7385

Change 5 days

5.2491

Change YTD

2-year German Govt Bond yield

-0.1990

-0.0040

-0.0300

-0.1010

10-year German Govt Bond yield

0.8080

0.0000

-0.0760

0.2670

Yield curve Germany

1.0070

0.0040

-0.0460

0.3680

2-year US Treasury Bond yield

0.6310

-0.0021

-0.0946

-0.0335

10-year US Treasury Bond yield

2.3201

-0.0144

-0.0717

0.1489

Yield curve US

1.6891

-0.0123

0.0229

0.1824

US 2-year sw ap rates

0.8995

-0.0135

-0.0870

0.0052

US 10-year sw ap rates

2.4014

-0.0435

-0.0498

0.1153

US sw ap curve

1.5019

-0.0300

0.0372

0.1101

EU 2-year sw ap rates

0.1480

-0.0063

0.0035

-0.0270

EU 10-year sw ap rates

1.1579

-0.0271

-0.0331

0.3459

EU sw ap curve

1.0099

-0.0208

-0.0366

0.3729

-0.0140

0.0000

0.0000

-0.0920

Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month

0.2857

-0.0006

-0.0022

0.0301

JPMorgan EMBI Plus Sovereign S

390.0500

-14.1400

-2.5500

2.6100

Equity markets

Close

Change 1 day % Change 5 days %Change YTD%

Nikkei 225

19,991

-1.13

-2.04

14.56

Hang Seng Index

26,695

-0.22

-0.79

13.09

Hang Seng China Enterprises Index

13,263

-1.13

-3.49

10.67

Australian Stock Exchange S&P/ASX 200 Index

5,570

0.82

0.45

2.94

Singapore Straits Times Index

3,300

-0.77

-1.41

-1.92

Euro Stoxx 50 Index

3,450

0.63

-2.86

9.66

S&P 500 Index

2,121

0.99

0.59

3.03

MSCI World Daily Total Return Gross USD

808

1.04

0.09

5.31

AEX Index

473

0.30

-2.46

11.43

-9.03

2.65

-31.30

Chicago Board Options Exchange Volatility Index

Commodity markets Reuters/Jefferies CRB Total Return Gold spot USD/Oz Generic first NYMEX Crude Light future Generic first Brent Crude Oil future LME Copper 3 Months Rolling Forw ard Generic first Wheat future Chicago Board of Trade Source Bloomberg

13

Close

Change 1 day % Change 5 days %Change YTD%

225

0.27

-0.53

1,201

-0.08

1.63

-2.53 1.36

60

-0.10

0.72

13.37

64

-0.23

0.38

11.83

5,755

0.17

-2.13

-8.65

488

0.00

-3.13

-17.25


3

Euro Crisis Summit – 19 June 2015

Day

Date

Time

Country

Key Economic Indicators and Events

Period

Latest outcome

Consensus

Monday Monday Monday Monday Monday Monday Monday

15/06/2015 15/06/2015 15/06/2015 15/06/2015 15/06/2015 15/06/2015 15/06/2015

08:30:00 11:30:00 14:30:00 15:15:00 15:45:00 16:00:00

IN RU US US EC US RU

Wholesale price index - % yoy May Key rate % Jun 15 Empire State PMI - Manuf. general business conditions - index Jun Industrial production - % mom May ECB publishes weekly QE details NAHB home builders' confidence index Jun GDP - % yoy 1Q P

-2.4 11.5 -2.0 -0.2

-2.5 11.5 4.9 0.2

59.0 -2

55.0 -2

Tuesday Tuesday Tuesday Tuesday

16/06/2015 16/06/2015 16/06/2015 16/06/2015

08:00:00 10:30:00 11:00:00 14:30:00

DE GB DE US

CPI - % yoy CPI - % yoy ZEW index (expectation economic growth) Housing starts - % mom

May F May Jun May

0.7 0.1 32 -11.1

0.7

Wednesday Wednesday Wednesday Wednesday Wednesday

17/06/2015 17/06/2015 17/06/2015 17/06/2015 17/06/2015

01:50:00 10:30:00 10:30:00 11:00:00 20:00:00

JP GB GB EC US

Merchandise trade exports - % yoy Claimant count unemployment rate - % Change in claimant count - thousands Core inflation - % yoy Policy rate - %

May May May May F Jun 17

2.4 2.30 -6.5 0.9 0.25

Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday

18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015 18/06/2015

09:30:00 09:30:00 09:30:00 09:30:00 10:00:00 10:30:00 14:30:00 14:30:00 14:30:00 14:30:00 16:00:00 14:30:00

EZ NL CH CH CH NO GB US US US US US US

Eurogroup meeting about Greece Consumer confidence - index SNB 3-month ibor lower target SNB 3-month ibor upper target SNB Sight Deposit Interest rate Policy rate - % Retail sales - % mom Inflation excl food and energy - % mom Inflation excl food and energy - % yoy Inflation (CPI) - % mom Inflation (CPI) - % yoy Philadelphia Fed - business confidence - index Initial jobless claims

Jun Jun 18 Jun 18 Jun 18 Jun 18 May May May May May Jun

6.0 -1.25 -0.25 -0.75 1.0 0.2 0.1 1.7 0.4 0.0 15.2 267.0

Friday

19/06/2015

JP

Policy rate - %

Jun 19

80.0

39 -3.4

ABN AMRO

11.5

56.0

37 -2.5

2.6

0.9 0.25

0.25

-1.25 -0.25 -0.75 1.0

-1.25 -0.25 -0.75

0.2 1.8 0.4 0.0 7.5

0.2 1.8 0.4 0.0

80.0

80.0

Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)

Find out more about Group Economics at: https://insights.abnamro.nl/en/ This document has been prepared by ABN AMRO. It is solely intended to provide financial and general information on economics. The information in this document is strictly proprietary and is being supplied to you solely for your information. It may not (in whole or in part) be reproduced, distributed or passed to a third party or used for any other purposes than stated above. This document is informative in nature and does not constitute an offer of securities to the public, nor a solicitation to make such an offer. No reliance may be placed for any purposes whatsoever on the information, opinions, forecasts and assumptions contained in the document or on its completeness, accuracy or fairness. No representation or warranty, express or implied, is given by or on behalf of ABN AMRO, or any of its directors, officers, agents, affiliates, group companies, or employees as to the accuracy or completeness of the information contained in this document and no liability is accepted for any loss, arising, directly or indirectly, from any use of such information. The views and opinions expressed herein may be subject to change at any given time and ABN AMRO is under no obligation to update the information contained in this document after the date thereof. Before investing in any product of ABN AMRO Bank N.V., you should obtain information on various financial and other risks and any possible restrictions that you and your investments activities may encounter under applicable laws and regulations. If, after reading this document, you consider investing in a product, you are advised to discuss such an investment with your relationship manager or personal advisor and check whether the relevant product –considering the risks involved- is appropriate within your investment activities. The value of your investments may fluctuate. Past performance is no guarantee for future returns. ABN AMRO reserves the right to make amendments to this material. © Copyright 2015 ABN AMRO Bank N.V. and affiliated companies ("ABN AMRO").


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.