Article / 20 February 2018 at 2:00 GMT

Morning Report APAC: Crude gains on Opec optimism, drop in inventories

APAC Sales Trading Desk / Saxo Capital Markets
Singapore

 

  • Oil rose as Opec reported falls in inventories, optimism on rebalancing

  • Investors are cautious on US inflation, with Fed minutes due out tomorrow

  • Base metals headed lower, led by falls for copper

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)

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 Speeches, key events

  • 0830 – Australian – RBA; release of minutes from February meeting.
  • 0700 – New Zealand – RBNZ governor Graeme Wheeler takes part select committee on annual report.

Overnight news, US

  • Special counsel Robert Mueller is investigating efforts by Trump’s son-in-law Jared Kushner’s to obtain cash from Chinese and other foreign investors during the presidential campaign.

 Overnight news, Singapore budget 

  • The Singapore government seeks to boost its revenues through a range of tax measures to help tackle the aging demographics problem.
  • GST will increase in 2021 from 7% to 9%.
  • Stamp duties on properties with value in excess of S$1 million will see a 1% increase.
  • There will be a few levy increases too.
  • The most meaningful market impact in near term is the proposal to remove taxes on ETF REITs; that’s a 17% withholding tax that will be scrapped. This should see ETF REITS catch a monster bid today.
  • There are doubts about compensation for the cost increases.

 

Foreign exchange

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  • USD was unchanged overnight with the US closed for a public holiday. There is not much change in terms of trends with the USD still on the way down.  
  • Emerging Markets: Very quiet day in the emerging market space as well with the volatility overall down.

Foreign exchange movements

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  • There was some interest in buying Vol for March 1, ahead of Federal Reserve Chairman Jerome Powell giving his first semiannual monetary policy report to the House Financial Services Committee.
  • There was little else to signal on a subdued trading day in global markets.

 Rates

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  • European bonds are generally lower amid uncertainty over the Italian election, which will be held in two weeks' time. The peripherals spread widened.

  
Commodities 

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Equities

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US equities

  • Closed for the President's Day public holiday.

European equities

  • The Dax (-66 points) and FTSE (-47 points) closed lower, breaking their winning streak. Volume was rather slow as markets in the US, as well as Greater China, were closed.
  • In the autos space, it was dragged lower throughout the day by news that carmaker Daimler (DAI) may have used software to cheat in diesel-emission tests in the U.S. The stock dropped over 2% to 71.01.
  • In other corporate news, Deutsche Bank (DBK) was the best performing banking stock, finishing the session up by over 2% after Bank of America Merrill Lynch raised its outlook on the stock and its target price. On the other hand, DBK will cut up to 500 investment banking jobs with 250 initially earmarked to go. The moves come after Deutsche reported that revenues in its investment bank fell 15% to $14.23 billion last year but compensation and benefits rose 8% to $4.26bn.

Hong Kong equities

  • Closed for a Lunar New Year public holiday


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Crude prices have firmed on the prospects of Opec and its partners keeping to their output rebalancing plans, and lower inventories. Photo: Shutterstock

  
– Edited by Robert Ryan


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