Global daily insight 25 september 2015

Page 1

Daily Insight Doom and gloom

Group Economics Macro & Financial Markets Research Maritza Cabezas, Aline Schuiling, Georgette Boele +31 20 6297789

25 September 2015   

US durable goods orders and Germany’s Ifo both turned out better than expected … … but mood in markets remains risk averse, with emerging market currencies in the weak spot … … especially the Brazilian real

US durable goods better than expected…

Emerging market currencies lower again

After two strong months, US durable goods orders declined by

In % with USD as basis

2% mom in August. This was slightly better than consensus

BRL UAH MXN COP KRW SGD CLP PLN MXN CLP CZK PEN CNH PEN RUB THB PHP HUF INR CNY TWD

expected (-2.3%) and was mainly the result of a fall in nondefense aircraft orders, which fell by 5.9%. Excluding transportation, core orders were unchanged. Vehicles fell 1.6% from a sharp increase of 4.9% the previous month, while there was also some slowdown in demand for computers and electrical equipment. The 3-month annualized growth rate of durable orders increased 8.5%, up from 4.1% in July. …trend in US investment to remain stable in third quarter Meanwhile non-defense capital goods shipments ex. aircrafts, which are used by the BEA to estimate investment in durable

-65 -60 -55 -50 -45 -40 -35 -30 -25 -20 -15 -10 -5

equipment in the National Accounts, declined by 0.2%, while

year-to-date

0

5

5-days

the three month annualized growth rate remained high, at 4.2%. Although the durable goods report is volatile, the

Source: Bloomberg

manufacturing sector is having a bumpy recovery, partly as a result of a strong dollar. All in all, we expect the trend in capital goods orders and shipments to remain stable in Q3.

Volatile ride in Brazilian real The Brazilian real fell sharply this week; close to 6% and set a new all-time low versus the US dollar. At some point USD/BRL

Germany’s Ifo business climate positive Germany’s Ifo business climate indicator unexpectedly rose in September. It increased to 108.5, up from 108.4 in August. The expectations component rose to 103.2 from 102.2, reaching its highest level since April. The current conditions component declined to 114.0 from 114.8, partly reversing its

almost reached 4.25. Afterwards the real recovered, but the situation remains very fluid. This steep decline further increases inflationary pressures. As a result, the central bank is between a rock (deep recession) and a hard place (inflation) in an environment of political turmoil and risk of further downgrades.

jump in August. The details of the report underline that the German economy is in healthy shape and relatively resilient against the slowdown in China and other EM.

The central bank will probably continue to intervene in FX markets to dampen the slide in the real, but this will unlikely be very aggressive. In the near-term, it is likely that weakness in

Markets turn more risk averse Despite the better than expected data for the US and Germany, investor sentiment in financial markets deteriorated sharply on Thursday. Assets that have safe-haven characteristics such as US Treasuries, German bonds, the Japanese yen, the US dollar and to a lesser extent gold all benefitted. Meanwhile, equities and commodity prices have declined and emerging market currencies were aggressively sold off; most the South African rand and the Brazilian real (more on this below).

the real will persist. In the current environment USD/BRL may overshoot to 4.5. Meanwhile, CDS spreads of Brazil have risen sharply. They have surpassed the levels seen at the height of the global financial crisis, but they are still far away from the 2002 crisis levels.


2

Doom and gloom – 24 September 2015

Financial markets Currency markets

Close

Change 1 day

Change 5 days

Change YTD

EUR/USD USD/JPY

1.1176

-0.4809

-1.0798

120.36

0.2415

0.3167

0.4842

AUD/USD

0.7020

-0.0569

-2.3508

-14.1284

USD/CHF

0.9789

0.3588

1.0217

-1.5488

NZD/USD

0.6339

-0.2518

-0.9376

-18.6995

GBP/USD

1.5224

-0.1181

-2.0082

-2.2662

USD/SGD

1.4247

0.2181

1.7861

7.4840

USD/CAD

1.3339

0.2555

0.8544

14.7836

Bond markets

Close

Change 1 day

Change 5 days

-7.6211

Change YTD

2-year German Govt Bond yield

-0.2460

0.0090

-0.0400

-0.1480

10-year German Govt Bond yield

0.6030

0.0060

-0.1780

0.0620

Yield curve Germany

0.8490

-0.0030

-0.1380

0.2100

2-year US Treasury Bond yield

0.7150

0.0352

0.0373

0.0505

10-year US Treasury Bond yield

2.1515

0.0249

0.0179

-0.0197

Yield curve US

1.4365

-0.0103

-0.0194

-0.0702

US 2-year sw ap rates

0.8258

0.0543

0.0150

-0.0685

US 10-year sw ap rates

2.1494

0.0576

-0.0274

-0.1367

US sw ap curve

1.3236

0.0033

-0.0424

-0.0682

EU 2-year sw ap rates

0.0605

-0.0005

-0.0095

-0.1145

EU 10-year sw ap rates

0.9985

0.0145

0.0015

0.1865

EU sw ap curve Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month

0.9380

0.0150

0.0110

0.3010

-0.0400

-0.0010

-0.0030

-0.1180

0.3255

-0.0010

-0.0141

0.0699

JPMorgan EMBI Plus Sovereign S

440.0600

13.3300

36.7300

52.6200

Equity markets

Close

Change 1 day % Change 5 days %Change YTD%

Nikkei 225

17,572

-2.76

-2.52

0.69

Hang Seng Index

21,096

-0.97

-3.47

-10.63

Hang Seng China Enterprises Index

9,470

-1.05

-4.96

-20.98

Australian Stock Exchange S&P/ASX 200 Index

5,116

0.87

-1.06

-5.46

Singapore Straits Times Index

2,846

-0.79

-0.80

-15.43

Euro Stoxx 50 Index

3,019

-1.97

-7.26

-4.04

S&P 500 Index

1,932

-0.34

-2.91

-6.15

MSCI World Daily Total Return Gross USD

718

-0.60

-4.05

-6.52

AEX Index

410

-2.21

-6.35

-3.44

23

6.06

11.02

22.24

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

Close

Change 1 day % Change 5 days %Change YTD%

194

0.63

-2.34

1,150

-0.36

0.94

-15.80 -2.96

45

0.07

0.58

-15.64

48

-0.10

1.37

-16.06

5,051

-0.12

-6.29

-19.83

498

0.15

2.31

-15.56


3

Doom and gloom – 24 September 2015

Day

Date

Time

Country

Monday Monday Monday

21/09/2015 21/09/2015 21/09/2015

15:45:00 16:00:00 20:00:00

EC US MX

Tuesday Tuesday Tuesday

22/09/2015 22/09/2015 22/09/2015

13:00:00 14:00:00 15:00:00

Wednesday Wednesday Wednesday Wednesday Wednesday

23/09/2015 23/09/2015 23/09/2015 23/09/2015 23/09/2015

Thursday Thursday Thursday Thursday Thursday Thursday Thursday Friday Friday Friday Friday

Key Economic Indicators and Events

Period

Latest outcome

Consensus

ABN AMRO

ECB announces weekly QE details Existing home sales - % mom Policy rate - %

Aug Sep 21

-4.8 3.0

-1.2 3.1

-0.8

TR HU US

Repo rate - % Base rate -% FHFA house price index - % mom

Sep 22 Sep 22 Jul

7.5 1.4 0.6

1.4 0.5

0.4

03:45:00 10:00:00 10:00:00 10:00:00 15:45:00

CN EC EC EC US

PMI manufacturing - index (Caixin) - flash PMI services - index Composite PMI output PMI manufacturing - index Markit - Flash PMI

Sep P Sep P Sep P Sep P Sep P

47.0 54.0 53.9 52.0 53.0

47.8 54.2 54.1 52.2

54.5 54.2 51.8

24/09/2015 24/09/2015 24/09/2015 24/09/2015 24/09/2015 24/09/2015 24/09/2015

06:30:00 10:00:00 10:00:00 11:10:00 13:00:00 14:30:00 16:00:00

NL DE NO EZ CZ US US

Producer confidence manufacturing - index Ifo - business climate - index Policy rate - % ECB allotment TLTRO-5 - EUR bn Repo rate - % New durable goods orders - % mom New homes sold - % mom

Sep Sep Sep 24

107.9

3.0 108.1

Sep 24 Aug Aug

3.5 108.5 0.8 73.8 0.1 -0.2 5.7

0.1 -2.2 1.5

-2.0 1.4

25/09/2015 25/09/2015 25/09/2015 25/09/2015

01:30:00 10:00:00 14:30:00 16:00:00

JP EC US US

CPI - % yoy M3 growth - % yoy GDP - % qoq annualised Univ. of Michigan cons. confidence - index

Aug Aug 2Q T Sep F

0.2 5.3 3.7 85.7

0.1 5.4 3.7 87.6

5.5 3.7 85.0

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.