Article / 23 May 2016 at 2:25 GMT

Morning Report APAC: Key global summits to impact oil, FX and bonds

Trading Desk / Saxo Capital Markets
  • Precious metals slipped on the back of higher expectations of a Fed rate hikes
  • Oil extended losses as the focus shifts to next week’s Opec meeting
  • Iran says it won’t join any pact to freeze crude output
  • Japan may announce a fiscal stimulus package around the G7 meeting 
  • That could put Japanese government bonds under pressure in the near term
  • Corn demand is strong and soybean meal has moved sharply higher
  • The UK Treasury says that a Brexit would prompt a 12% fall in the pound

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time: GMT plus 8 hours)

0750: JPY – Exports YoY (Act. -10.1, Exp. -9.9), Imports YoY (Act. -23.3, Exp. -19.2)
0750: JPY – Trade Balance (Act. JPY 823.5Bn, Exp. ¥
1300: SGD  – CPI NSA MoM (Exp. 0.1%, Prev. 0.0%), YoY (Exp. -0.7%, Prev. -1.0%)
1300: SGD  – CPI Core YoY (Exp. 0.7%, Prev. 0.6%)
2145: USD – Markit US Manufacturing PMI (Exp. 51.0, Prev. 50.8)


0930: JPY – Bank of Japan deputy governor Hiroshi Nakaso speech in Tokyo
2000: USD  – Fed's John Williams speaks in New York

Overnight news

  • Fed speech: Eric Rosengren, the president of the Federal Reserve Bank of Boston said “I want to be sensitive to how the data comes in, but I would say that most of the conditions that were laid out in the minutes, as of right now, seem to be… on the verge of broadly being met,” . “The reason I am more confident is we are getting better data,”. “As long as we are getting progress that is gradual, like we have been seeing, then that is an environment where gradual increases are quite appropriate.”
  • US: Sales of existing homes rose for a second straight month during April. The National Association of Realtors said sales increased 1.7% MoM (Exp. +1.3%) to a seasonally adjusted annual rate of 5.45mln (Exp. 5.4mln)

IMM futures positions

  • IMM Futures Positions: USD Shorts positions were reduced slightly to $3.4 bn

Key position changes

  • AUD longs fell ~a third from $2.8bn to $1.8bn, their lowest level since March
  • GBP shorts increased from $3.2bn to $3.5bn
  • CAD longs edged lower to $1.8bn from $2.0bn
  • EUR shorts stayed flat at $3.2bn, as did JPY longs at USD6.7bn
  • NZD long positions dropped to $0.5bn from $0.6bn
  • MXN shorts were unchanged at $1.3bn
  • CHF longs fell to USD0.5bn from $0.9bn


Foreign exchange


It was very quiet moves overnight for the US dollar, except in GBP (see our new section dedicated to Brexit below).

The USD found some good offers against emerging market currencies, with USDBRL down 1.2%, USDCNH who is still hitting locals selling in the forwards markets triggering some selling in USDKRW and USDSGD as well

 Vols trading a bit lower across the board on Friday, with risk on sentiment in stock market as well. We did see EURUSD well bid after Federal Open Market Committee minutes, but spot has not done any further reaction today. For options traders US data is more important, as it is losely correlated to a potential Federal Reserve rate hike in June.

EURCHF spot has reached a three-month high now, but vols remain on the lows, with 1w ard 4.25 vol. We are in the view that long gamma at this level could perform considering the levels of vols



Ten year US Treasuries were little changed at 1.84%. Market odds of a June rate hike ended the week at around 30%, up from 4% a week ago.

Japanese government bonds could come under pressure in the near term if Japan announces a new fiscal stimulus package around the G7 meeting (made up of Canada, France, Germany, Italy, Japan, the UK and the US) later this week, which runs from May 26 to 27.







Equities markets consolidated Friday helping to retrace weakness from earlier in the week. The S&P 500 finished up 0.6%, seeing it close broadly unchanged on the week despite a significant repricing of the next Fed rate hike.

Applied Materials Inc. (+13.8%) reported an adjusted Q2 profit of $0.34 (Market est: $0.32) from $0.29 a year ago. Sales edged higher to $2.45bkln (Mkt est: $2.43bln) even as orders hit a 15-year high.

Deere & Co. (-5.5%) reported a Q2 profit of $495.4mln, or $1.56 per share (market est: $1.47), down from $690.5mln, or $2.03 per share, a year ago

Foot Locker Inc. (-6.5%) reported a Q1 profit of $191mln, or $1.39 per share (Mkt est: $1.39) up from $184mln, or $1.29 per share, a year ago. CEO Richard Johnson said the company “navigated well through a variety of challenges, not least of which were rapidly-shifting product-category preferences by our customers.”

It was a similar story in Europe, although gains to end the week were larger, with the Euro Stoxx 50 finishing up 1.5%. Additionally, the FTSE 100 closed up 1.7%, the Dax up 1.2%, and the CAC40 up 1.7%.




Hong Kong equity preview

Analyst views

  • China Life (2628 HK): Cut to neutral at Guotai Junan.
  • Cosco Pacific (1199 HK): Cut to neutral at Guotai Junan.
  • CRRC (1766 HK): Cut to neutral at Macquarie.
  • Lenovo (992 HK): Cut to neutral at UBS.
  • PICC (1339 HK): Cut o neutral at Guotai Junan.

Company news

  • HK PPTY: Centa-City Leading Index (CCL) -0.17% WoW to 128.41 points.
  • BOCHK (2388) is in advanced talk to sell its stake in Chiyu Banking Corp to Xiamen Intl BK and Xiamen gov.
  • Minsheng BK (1988) said CBRC had approved the opening of its branch in Xining, Qinghai. CIC ended talk with Yum Brands. Yum Brands will not satisfy the CIC consortium’s desire to have majority control in the CH business.
  • CH Invstmt. Dev. (204) repurchased 8.42m shares on May 20 at average price 0.113.
  • CH Huarong Asset Mgt. (2799) to list $11bn MTN programme in HK.
  • CH Southern (1055) to issue up to 5bn yuan of 5y bond.
  • Shui On (272)’s chairman said January-April contracted sales at 8.55bn yuan. With two new projects coming, he is confident to exceed the 24bn yuan whole year target.
  • MTR (66): Hong Kong government to start three month public consultant on the company’s fare adjustment mechanism.
  • PetroChina (857)’s Liaoyang Petrochemical had fire at olefin factory’s cracking unit after leak.
  • Anhui Conch (914) said they have fulfilled the condition to buy stakes in West CH Cement (2233).
  • CH Molybdenum (3993) plans private issuance of 18bn yuan A-shares for overseas takeover, to be approved by CSRC.

Japan equity preview

Analyst views

  • NTT Docomo (9437 JP): Raised to outperform from neutral at Daiwa Securities.
  • Nihon Trim (6788 JP): Cut to neutral from buy at Ichiyoshi Research.

Company news

  • Fancl (4921 JP): April sales +4.3% y/y.
  • Japan Tobacco (2914 JP): April domestic cigarette volume -13.5% y/y.
  • Nihon Trim (6788 JP): Downgraded to neutral from buy at Ichiyoshi Research.
  • Nikon (7731 JP): Names Masahi Oka CFO.
  • Nippon Sheet Glass (5202 JP): To conduct 1-for-10 reverse split.
  • NTT Docomo (9437 JP): Raised to outperform from neutral at Daiwa.
  • Oki Electric (6703 JP): To conduct 1-for-10 reverse split.
  • Shidax (4837 JP): Forecasts full-year oper. profit of ¥3.3bn for current fiscal year after loss of ¥771mln for latest FY.
  • Shin-Etsu Chemical (4063 JP): To end poison-pill takeover defence.
  • Toshiba TEC (6588 JP): Forecasts oper. profit of 14b yen for current fiscal year after loss of ¥481mln for latest discal year.

Australia equity preview

  • Aconex (ACX AU) raised to buy vs neutral at UBS

Source: Bloomberg / CIMB


The Iranian capital, Tehran ... even if Opec ministers agree on a crude oil production freeze at their meeting next week, Iran says it won’t join any pact to freeze output. Photo: iStock

– Edited by Robert Ryan

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

Please contact us for any market updates. Global Sales Trading: +65 6303 7818

  • Christopher Moltke-Leth -
  • Lakshmi Thurai -
  • Tareck Horchani -
  • Edmund Liu -

Global Macro Strategist: +65 6303 7622

  • Kay Van-Petersen -

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 click here.  

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 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


The Saxo Bank Group entities each provide execution-only service and access to 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 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 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 or as a result of the use of the 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 your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. 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