Article / 14 August 2015 at 1:00 GMT

Morning Report APAC: CNY calm ensues but oil takes a hit

APAC Sales Trading Desk / Saxo Capital Markets
Singapore
  • Market likely to remain wary after the PBOC intervention in the spot market
  • CNY fixing came in at 6.4010 yesterday despite a previous spot close of 6.3874
  • EUR dropped after the retail sales data in the US but rallied back quickly

By Saxo APAC Sales Trading

Economic Data of the Day (Singapore Time)

1300: SGD – Retail Sales SA MoM (Prev. 2.4%), YoY (Prev. 6.1%), Ex Autos YoY (Prev. 0.9%)
1330: EUR – France GDP YoY Q2 (Prev. 0.8%), QoQ (Prev. 0.6%)
1400: EUR – Germany GDP YoY Q2 (Prev. 0.3%), QoQ (Prev. 1.0%)
1600: INR – Wholesale Prices YoY July (Prev. -2.40%)
1700: EUR – Eurozone CPI YoY (Prev. 0.2%), MoM (Prev. 0.0%), Core CPI (Prev. 1.0%)
2030: USD – PPI Ex Food and Energy MoM (Exp. 0.1%, Prev. 0.3%), YoY (Exp. 0.5%, Prev. 0.8%)
2130: USD – Industrial Production MoM (Exp. 0.3%, Prev. 0.3%)
2200: USD – University of Michigan Sentiment (Exp. 94.0, Prev. 93.1)

Speeches
10.15am: AUD – RBA’s Kent to gives a speech in Brisbane

Overnight news


  • CNY fixing came in at 6.4010 yesterday despite a previous spot close of 6.3874
  • People's Bank of China deputy governor Yi Gang said a number of points including:
-    Flexible exchange rate will increase room for central bank to adjust monetary policy;
-    There is no need for China to promote exports by adjusting exchange rate;
-    China is promoting capital account convertibility according to existing agenda;
-    It won’t change schedule due to market volatility or external factors;
-    Possible extension of trading hours is in consideration of future connections with overseas markets;
-    Chinese regulators should believe in the market, respect the market and follow the market;  Managed floating exchange rate regime is suitable for China;
-    PBoC has already exited from regular intervention on yuan;
-    ‘Nonsense’ saying that China intends to devalue yuan by 10% to boost exports;
-    Current exchange rate level consistent with China’s economic fundamentals
  • Bank of Korea decided to keep the BOK 7-Day Repo Rate at 1.50% as expected yesterday
  • US Retail Sales came at 0.6% MoM as expected with an upward revision from the previous month to 0.0% from -0.3%
  • Recession deepens in Russia but Russian Central Bank opposes the idea of capital controls  and will review its economic forecasts by September 11
  • Oil price touched a 6-year low, hitting $41.35

Foreign Exchange
xxx
The market calmed down yesterday in USDCNH despite the high fixing. The market is probably wary after the PBOC intervention in the spot market and comments from them saying that the level had become more balanced now.

So we are back in the commodity story and oil touching a 6-year low at 41.35. USDCAD rallied back above 1.3000. Despite a stronger than expected GDP yesterday in Malaysia at 4.9% (expected 4.5%), USDMYR rallied overnight in NY to close at 4.0515 In the 1M NDF, NZD moved 1% lower yesterday but a support at 0.6500 has been created the past month.
USDBRL also rallied 1% overnight as well as USDMXN which is close to test again 16.50

EURUSD
dropped after the retail sales data in the US but rallied back quickly after and it seems that the momentum of higher EURUSD is holding well. The main story of weaker commodity currencies and EM is far from being over and with oil testing new lows, we should expect USD to remain bid against these currencies.

Foreign exchange movements
xxx
 
The market calmed down yesterday in CNH and the volatilities have been coming off in the pair dropping around two volatilities. Most of the movements in the G10 space also came off yesterday on a quieter market  but we should see what the fixing in CNY brings us today and whether oil breaks the 40 level which would trigger another round of USD buying.

Rates

xxx
 



A calmer market in the Chinese market and US retail sales which came in as expected pushed rates higher by 3 basis points.

Commodities

xxx
 
Equities
xxx
 











The biggest European decline since October was put aside on Thursday, as a stabilisation in the yuan offered some relief and focus was on Nestle and tour operator TUI which rallied after reporting earnings.
  • Nestle rose 2.7% reported greater-than-expected H2 sales, despite the recall of its Maggi noodles in India; and stuck to its 2015 outlook
  • TUI, tour operator, spiked 6.6% after announcing FY profit growth at the upper end of its forecast
However, US stocks fluctuated overnight and then closed largely unchanged, as anxiety over China eased, while investors focused on solid July retail sales bolstering potential for a rate hike in September.  With WTI continuing to slide, energy companies also continued its retreat. Consol Energy and Transocean fell more than 6.5%.

  xxx
With oil at $41.35 and weakening, it is the real story of the moment. Photo: iStock

-- Edited by Adam Courtenay

This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please see: http://sg.saxomarkets.com/support/legal-documentation/disclaimer.

Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.

Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.

Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.
Copyright | Disclaimer | Risk Warning | Privacy Policy | Contact Us

Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail