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Kuwait Finance House: Market Commentary - 10 December

IM Insights
By IM Insights
4 years ago
Kuwait Finance House: Market Commentary - 10 December


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  1. Tue , 10 Dec 2019 Report produced on Tue, 10/Dec/2019
  2. Forex Market JAPANESE YEN 110 .00 CLOSE 1M %chg 3M %chg 108.55 -0.66% 1.23% 109.50 109.00 108.50 108.00 107.50 107.00 106.50 20D SMA 9-Dec 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep 23-Sep 16-Sep 9-Sep 106.00 -USD/JPY's recently weakness mildly extended yesterday amid a lack of fresh cues, with the pair still hanging precariously just above its 50-day SMA support during the Asian session. Muted USD/JPY reactions were seen to Japan's earlier-released November y/y money stock prints too. -Ahead today, Japan sees its Nov P y/y machine tool orders print due. Further out this week, Japan's data deluge will persist, to only peak on Friday. Eyes will also be out on the progress of U.S.-China trade talks ahead of the U.S.' 15 December tariff dateline for JPY cues. -The U.S. a few Tier 2 prints released later today as its November NFIB small business optimism, final Q3 nonfarm productivity, and final Q3 unit labor costs prints come due. -Further out this week, the U.S.' November CPI print released on Wednesday, the outcome of the U.S. FOMC December decision revealed on Thursday, and the U.S.' November retail sales print released on Friday are of particular note. 50D SMA EURO 1.12 CLOSE 1M %chg 3M %chg 1.1062 0.42% 0.14% 1.12 1.11 1.11 1.10 1.10 1.09 1.09 20D SMA 50D SMA 9-Dec 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep 23-Sep 16-Sep 9-Sep 1.08 -EUR/USD was mildly lifted during the Asian session as USD weakness set in ahead of the week's key events. -On this, the pair was seen to have once again entered into a struggle with its 100-day SMA resistance, though its longer-term resistance at its 200-day SMA still looms above as its bearish trend seen since May 2018 persists. -In the absence of bullish EUR/USD justifications, the longer-term balance of risk continues to be tilted towards fading the pair on strength towards its 200-day SMA, with an eye for eventual downside at about 1.0964 or even 1.09. -Ahead today, the Eurozone docket is light with only its Dec ZEW survey expectations of note. Further out this week, the Eurozone's Oct industrial production print and the ECB's Dec meeting outcome scheduled both for Thursday are of note.
  3. Forex Market POUND STERLING 1 .33 1.31 1.29 1.27 1.25 1.23 20D SMA 9-Dec 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep 23-Sep 16-Sep 9-Sep 1.21 CLOSE 1M %chg 3M %chg 1.3143 2.92% 6.46% -GBP/USD was again deadpan during the Asian session amid a lack of fresh drivers. The pair persists just under its 17 Apr 2018 - 03 Sep 2019 50.0% Fib level at 1.3168. -As mentioned before, a substantive GBP/USD breach of the 1.3 handle will likely open the door for further upside towards the likes of its 17 Apr 2018 - 03 Sep 2019 50.0% Fib level at 1.3168. -The UK sees a slew of data releases ahead today. Further out this week and in terms of scheduled prints, the UK sees its Nov BOE/TNS next 12-month inflation print scheduled for Friday of note. -That said, politics-related headlines will likely hog the UK spotlight as polling day on 12 Dec looms. The U.S. sees a few Tier 2 prints released later today as its November NFIB small business optimism, final Q3 nonfarm productivity, and final Q3 unit labor costs prints come due. 50D SMA TURKISH LIRA 5.95 CLOSE 1M %chg 3M %chg 5.8074 0.72% 1.04% 5.90 5.85 5.80 5.75 5.70 5.65 20D SMA 50D SMA 9-Dec 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep 23-Sep 16-Sep 9-Sep 5.60 -Turkey's lira declined some 0.5% against the dollar on Monday, ahead of an expected rate cut from the central bank this week and as tensions fester over Ankara's purchase of Russian defence equipment and disputes in the eastern Mediterranean. -The lira traded at 5.7995 against the dollar at 1252 GMT, weakening some 0.5% from Friday's close of 5.7715. Earlier, it reached 5.8060, its weakest level since October 23. -This week's rate decisions, mainly the Turkish central bank meeting on Thursday, will determine the direction of the lira, said a forex trader who requested anonymity. The U.S. Federal Reserve and European Central Bank are also holding monetary policy meetings this week. -The central bank has its policy interest rate by 10 percentage points since July to 14%. A Reuters poll last week showed that it is expected to cut another 1.5 percentage points on Thursday.
  4. US Treasury & Dollar Index 10Y US-TREASURY 1 YR HISTORY OF YIELDS (BID) 3.5 1M %chg 3M %chg 1.82 -5.28% 12.89% -Gold was trading in a tight range on Tuesday ahead of a two-day rate-setting meeting by the U.S. central bank, with investors awaiting clarity on whether a next round of U.S. tariffs on Chinese goods will come into effect this weekend. -Spot gold was down 0.1% to $1,460.17 per ounce by 0350 GMT. U.S. gold futures was flat at $1,464.50. -Both the United States and China have adopted a reconciliatory tone, with China saying it hoped to make a deal as soon as possible. President Donald Trump has said he was working with Beijing on an agreement ahead of new tariffs on $156 billion worth of Chinese imports on Dec.15. -The impact of a prolonged trade war on economic growth has led the U.S. Federal Reserve to cut rates three times this year, sparking demand for the non-yielding bullion. Gold is now on track for its best year in almost a decade. 3 2.5 2 1.5 1 TODAY'S KEY ECONOMIC INDICATOR RELEASES DOLLAR INDEX INDICATOR wh Ctry / Regn Time For Prior NFIB Business Optimism Idx US 10/Dec 15:00 Nov 102.40 Labor Costs Revised US 10/Dec 17:30 Q3 3.6 3.3 Productivity Revised US 10/Dec 17:30 Q3 -0.3 -0.1 99.00 Redbook MM US 10/Dec 17:55 w/e 0.4 98.50 ZEW Survey Expectations* EU 10/Dec 14:00 Dec -1 Construction O/P Vol MM GB 10/Dec 13:30 Oct -0.2 -0.2 GDP Est 3M/3M* GB 10/Dec 13:30 Oct 0.3 0.0 97.50 Industrial Output MM GB 10/Dec 13:30 Oct -0.3 0.2 97.00 Manufacturing Output MM GB 10/Dec 13:30 Oct -0.4 0.0 Goods Trade Bal. Non-EU GB 10/Dec 13:30 Oct -4.032 -3.5 Services YY GB 10/Dec 13:30 Oct 1.3 100.00 99.50 20D SMA 50D SMA 9-Dec 2-Dec 25-Nov 18-Nov 11-Nov 4-Nov 28-Oct 21-Oct 14-Oct 7-Oct 30-Sep 23-Sep 16-Sep 98.00 9-Sep CLOSE Consensus
  5. Daily Market Report KWD - CBK FIX 0 .3046 0.3044 0.3042 0.304 0.3038 0.3036 0.3034 0.3032 0.303 0.3028 0.3026 4/Feb/19 26/Mar/19 CENTRAL BANK OF KUWAIT 15/May/19 4/Jul/19 23/Aug/19 12/Oct/19 1/Dec/19 20/Jan/20 MARKET SUMMARY KWD (CBK FIX) CLOSE 3M% CHG 0.30335 -0.10% POLICY RATES INDICATOR ON Repo Rate As of 31/Oct/'19 Value 2.25 Prior 2.25 Change 0.00 1W Repo Rate 31/Oct/'19 2.50 2.75 -0.25 1M Repo Rate 31/Oct/'19 3.00 3.25 -0.25 KWD ON Rate 31/Oct/'19 10.00 10.00 0.00 31/Oct/'19 2.75 3.00 -0.25 INSTRUMENT OPEN HIGH LOW CLOSE %CHG 1D Discount Rate EUR 1.1054 1.1078 1.105 1.1062 0.05% LIBOR RATES GBP 1.3136 1.318 1.3115 1.3143 0.06% Tenor Value Tenor JPY 108.67 108.67 108.41 108.55 -0.04% ON 1.53 3M Value 1.89 TRY 5.7748 5.8162 5.767 5.8074 0.55% SW 1.58 6M 1.89 Dollar Idx 97.677 97.724 97.558 97.644 -0.06% 1M 1.72 1Y 1.92 Brent 64.29 64.5 63.61 64.25 -0.22% 2M 1.82 WTC - - - 58.99 -0.35% Gold 1459.09 1465.4 1458.45 1461.89 0.16% OTHER C-BANK RATES KWSE Index 6081.15 6110.48 6081.15 6095.65 0.35% INDICATOR KIBOR RATES Tenor Value Tenor Value Value Prior Change FED Target Rate As of 30/Oct/'19 1.75 1.00 0.75 ECB Refinancing Rate 10/Mar/'16 0.00 0.05 -0.05 ON 1.69 3M 2.75 BOE Bank Rate 02/Aug/'18 0.75 0.50 0.25 SW 2.19 6M 2.94 BOJ Prime Rate 12/Jul/'19 0.95 1.00 -0.05 1M 2.56 1Y 3.13 TRY ON Lending Rate 24/Oct/'19 15.50 18.00 -2.50
  6. Global Top News KEY INTERNATIONAL STORIES U .S. Democrats expected to unveil two articles of impeachment against Trump Asian shares ease slightly as tariff deadline looms -Democrats in the U.S. House of Representatives were expected to unveil two articles of impeachment against Republican President Donald Trump on Tuesday, a senior Democratic aide said, setting the stage for a possible vote this week on impeachment. -The House aide spoke on condition of anonymity on Monday night and declined to give any details. Democrats were expected to draft articles of impeachment on abuse of power and on obstruction of Congress, the aide told Reuters. The Washington Post first reported the expected articles, citing three unidentified officials. -Asian equity markets ticked down on Tuesday, tracking Wall Street losses as investors fretted over a Dec. 15 deadline for the next round of U.S. tariffs on Chinese imports to take effect -The deadline looms over a series of other significant events this week, with markets also awaiting the UK election on Thursday, and U.S. and euro zone central bank meetings. Investors have focused this year on the risks of the UK crashing out of the European Union without a deal and a sharp escalation in trade war tensions, said Frank Benzimra, head of equity strategy at Societe Generale. Trump wants 'movement' from China to avoid Dec. 15 tariffs -US ag secretary China November producer prices fall for 5th month, CPI soars -U.S. President Donald Trump does not want to implement the next round of scheduled tariffs against Chinese goods on Dec. 15, but he wants "movement" from China to avoid them, U.S. Agriculture Secretary Sonny Perdue said on Monday. -Beijing and Washington have been embroiled in a 17-month trade war that has disrupted global grain flows, rattled markets and weighed on world economic growth. -China's producer prices fell in annual terms for the fifth consecutive month in November while consumer prices spiked as food costs climbed, data showed on Tuesday, complicating policymakers' efforts to boost demand as economic growth slows. -Sluggish manufacturing activity from U.S. trade pressures and weakening demand at home have put pressure on Beijing to roll out more stimulus to bolster its economy. The producer price index (PPI), seen as a key indicator of corporate profitability, fell 1.4% on year, National Bureau of Statistics (NBS) data showed, falling for the fifth month in a row. U.N. Security Council to meet over North Korea on Wednesday at U.S. request We can rip up the EU rule book, PM Johnson tells UK voters -The U.N. Security Council will meet on Wednesday, at the request of the United States, over missile launches by North Korea and the possibility of an "escalatory" provocation after Pyongyang conducted what it said was a key test at satellite launch site. -The move comes amid growing tensions and stalled talks between the United States and North Korea that Washington hopes will lead to Pyongyang giving up its nuclear and missile programs. -Prime Minister Boris Johnson will bolster his argument on Tuesday for leaving the European Union early next year, urging voters to return him to power so Britain can "rip up the EU rule book and write a new one for ourselves". -Just days before Britain votes in an election he called to try to break the deadlock over Brexit, Johnson will repeat his desire to "finally get Brexit done" on a tour of traditionally Labour supporting areas he hopes to win over. DISCLAIMER: This document and its contents do not reflect the opinions, views, policies or positions of Refinitiv or its affiliates and they are prepared for Kuwait Finance House (KFH)’s and their clients internal consumption only and do not constitute an offer, or the solicitation of an offer, or advice to buy or sell a security or to make a particular investment or follow a particular strategy or enter into any agreement. The information and any views expressed are given as of the date of writing and are subject to change. While the information has been obtained from sources believed to be reliable, Refinitiv does not warrant that it is accurate or complete and it should not be relied on as such. Responsibility for any decisions taken by KFH (including but not limited to its affiliates and subsidiaries) on the basis of information contained herein solely rest with the end user i.e. KFH’s clients. Market Data and News Source is Refinitiv Eikon. Refinitiv its affiliates, subsidiaries, employees, and contractors accept no liability for any direct or indirect loss arising out of the use of this document or its contents. Market data & News sourced from Refinitiv Eikon