Global Markets Update QNB Economics 25 December 2016

Transcription

1 Global Markets Update QNB Economics 25 December 2016

2 Executive Summary Key Takeaways Brazil s president announced a number of measures aimed at tackling corruption and strengthening the economy in 2017 Most currencies were stable over the past week Domestic factors in EMs determined the stock performance of various countries Commodity markets showed no major movements last week A quiet week ahead with the main data releases in the US Sources: Bloomberg and QNB Economics 2

3 Brazil s president announced a number of measures aimed at tackling corruption and strengthening the economy in 2017 Global Benchmark Yields (%, local currencies) Maturity 16-Dec 23-Dec Change in Yield (bps) Advanced Economies Week MTD* YTD* US 10 yrs Germany 10 yrs France 10 yrs Italy 10 yrs Japan 10 yrs UK 10 yrs Emerging Markets Bahrain** 7 yrs Brazil 10 yrs China 10 yrs India 10 yrs Indonesia 10 yrs Nigeria 9 yrs Qatar** 9 yrs N/A Russia 10 yrs Saudi Arabia** 10 yrs N/A South Africa 10 yrs Turkey 10 yrs Abu Dhabi** 9 yrs N/A Dubai** 4 yrs Turkey yields fell after the Central Bank kept rates unchanged despite market expectations that it would hike in order to defend the depreciating Turkish lira Legend > 2 standard deviation fall in yields > 1 standard deviation fall in yields < 1 standarad deviation change in yields > 1 standard deviation rise in yields > 2 standard deviation rise in yields Sources: Bloomberg and QNB Economics; *Month to Date and Year to Date; **USD denominated 3

4 Most currencies were stable over the past week Global Exchange Rates vs USD 16-Dec 23-Dec Change (%) Advanced Economies Week MTD YTD US Dollar Index Euro Area* Japan UK* Emerging Markets Brazil China Egypt Indonesia 13,395 13, India Kuwait Nigeria Russia Turkey South Africa UAE Bahrain Oman PEGGED Qatar Saudi Arabia The Brazilian real strengthened as the economic measures announced boosted demand for Brazilian assets Legend > 2 standard deviation strengthening of currency > 1 standard deviation strengthening of currency < 1 standarad deviation change in currency > 1 standard deviation weakening of currency > 2 standard deviation weakening of currency Sources: Bloomberg and QNB Economics; * Exchange rate quoted as amount of USD per currency unit in line with market convention, other exchange rates are amount of currency per USD 4

5 Domestic factors in EMs determined the stock performance of various countries Global Equity Indices 16-Dec 23-Dec Change (%) Advanced Economies Week MTD YTD US (S&P 500) 2,258 2, Europe (STOXX 50) 3,259 3, Japan (Nikkei 225) 19,401 19, UK (FTSE 100) 7,012 7, Emerging Markets Bahrain (BB) 1,191 1, Brazil (IBOVESPA) 58,389 57, China (Shanghai ) 3,123 3, Egypt (EGX 30) 11,444 12, India (CNX NIFTY) 8,139 7, Indonesia (Jakarta) 5,232 5, KSA (Tadawul) 7,091 7, Kuwait (KSE) 5,668 5, Nigeria (All Share) 26,707 26, Oman (Muscat 30) 5,729 5, Qatar (Doha 20) 10,224 10, Russia (MICEX) 2,231 2, S.Africa (J'burg 40) 43,165 42, Turkey (Istanbul 100) 77,590 76, UAE (Abu Dhabi) 4,549 4, UAE (Dubai) 3,657 3, Egypt s stock index continued its bull run following the currency float UAE indices were down due to profit-taking following the strong performance seen in previous weeks Indonesia stocks fell as the central bank communicated a lower Q4 growth forecast than previously estimated Legend > 2 standard deviation rise in equity index > 1 standard deviation rise in equity index < 1 standarad deviation change in equity index > 1 standard deviation fall in equity index > 2 standard deviation fall in equity index Sources: Bloomberg and QNB Economics 5

6 Commodity markets showed no major movements last week Commodity Prices* 16-Dec 23-Dec Change (%) Energy Week MTD YTD Brent WTI LNG Precious Metals Gold 1,135 1, Silver Industrial Copper 5,636 5, Steel Aluminum 1,717 1, Wheat Corn Cocoa 2,238 2, No major changes in commodities Legend > 2 standard deviation rise in price > 1 standard deviation rise in price < 1 standarad deviation change in price > 1 standard deviation fall in price > 2 standard deviation fall in price Sources: Bloomberg and QNB Economics; * Spot prices or nearest expiring future 6

7 A quiet week ahead with the main data releases in the US Last Week s Data Review* Date Country Event Period Consensus Actual Previous Dec 21 US Crude oil inventories change 16-Dec -2.4m 2.3m -2.6m Dec 21 US Gasoline inventories change 16-Dec 1.0m -1.3m 0.5m Dec 22 US Durable Goods Orders Nov P -4.8% -4.6% 4.6% Dec 22 US GDP Annualised QoQ Q3 P 3.3% 3.5% 3.2% Dec 22 US Initial Jobless Claims 10-Dec 257k 275k 254k Dec 23 US Uni of Michigan Sentiment Dec Forthcoming Economic Events* Date Country Event Period Consensus Actual Previous Dec 27 Japan Tokyo CPI Ex-Fresh Food YoY Dec -0.4% -0.4% Dec 28 Japan Industrial Production MoM Nov P 1.7% 0.0% Dec 27 US Conf. Board Consumer Confidence Dec Dec 29 US Initial Jobless Claims 24-Dec 265k 275k Dec 29 UK Nationwide House Px YoY Dec 3.8% 4.4% Dec 29 EU M3 Money Supply YoY Nov 4.4% 4.4% Sources: Bloomberg and QNB Economics * P stands for preliminary and F for Final 7

8 Two-Year Performance of Major Asset Classes Sovereign 10-Year Bond Yields Equities 3 2 US Germany Advanced Economies* (left axis) Emerging Markets** (right axis) /14 03/15 06/15 09/15 12/15 03/16 06/16 09/ /14 03/15 06/15 09/15 12/15 03/16 06/16 09/ Exchange Rates Commodities Dollar Index (left axis) EUR:USD (right axis) Oil (left axis) Food*** (right axis) /14 03/15 06/15 09/15 12/15 03/16 06/16 09/ /14 03/15 06/15 09/15 12/15 03/16 06/16 09/ Sources: Bloomberg and QNB Economics; * MSCI World Index; ** MSCI Emerging Markets Index;; ***S&P GSCI Agricultural Index, which includes wheat corn, soybeans, coffee, sugar, cocoa and cotton 8

9 Disclaimer and Copyright Notice All the information in this report has been carefully collated and verified. However, QNB Group accepts no liability whatsoever for any direct or consequential losses arising from its use. Where an opinion is expressed, unless otherwise cited, it is that of the authors which does not coincide with that of any other party, and such opinions may not be attributed to any other party. The report is distributed on a complimentary basis to valued business partners of QNB Group. It may not be reproduced in whole or in part without permission. QNB Economics Team Ziad Daoud Head of Economics Rory Fyfe Senior Economist Ali Jaffery Economist Nancy Fahim Economist