Treasury Morning Brief - 2 May

Transcription

1. TREASURY MM ORNING BRIEF TREASURY ORNING BRIEF 02 May 2017 Treasury Sales +44 207 648 7786/89 - Reuters BACM Market Report Markets Sell in May and Go Away! That's how the old adage goes. If weekend reports are to be believed EU officials would very much like to change that to 'May Go Away' , EC president Jean-Claude Juncker apparently saying "Brexit cannot be a success", German Finance minister Schauble joining the wolf gang reportedly barking a warning "Britain must know there is no free lunch". So far unlike the Joshua, Klitschko fight its all 'handbags' . Soft or Hard Brexit labelling going forward will be pointless , fact is negotiations will be tough, both sides having to pick themselves up off the canvass as the rounds unfold. Economic data of limited interest today, company earnings playing a bigger part, FOMC rate decision on Wednesday expected to throw in no surprises, you could argue that Friday's U.S Non Farm Payrolls are the main event on the card. Markets are expecting the number to rebound to 190k from the weather worn 98k last time out, June tightening is still a possibility for the Fed although unlikely. European Stocks have edged higher this morning, strong U.S tech stocks sparking things into life, FTSE profiting from BP results. A cheery start to the shortened week in London, Core Bond Yields higher for Gilts and U.S Treasuries, EGB's as yet to play catch-up. U.S Treasury Secretary Mnuchin said that issuance of ultra-long bonds "Could absolutely make sense", a steepening of the curve as markets return from the Bank holiday the result. WTI Crude for June delivery is making a concerted effort to push back to 50 bucks, I fear it may crumble like an Arsenal FC defence and return to a $48 level with a rise in U.S fuel stocks expected. EM Credit Decent start to a fresh week, new month, similar action to the last. EM bonds generally experiencing good buying interest, Turkey 5 year CDS doing very nicely heading towards 200 all being well, a convergence with South African 5 year insurance not out of the question. Egypt Eurobond sovereign paper continues to outperform, to note is IMF talks have started, due to end on 11th May, inflation no doubt high on the agenda the current interest rate of 14.75 percent one to watch as the central bank today said they would move the scheduled meeting back to the 21st of May from the 18th. Little out on the Primary front , a second Tier offering from Fibabanka in the making as they look to debut in the international markets and raise up to $300m, criteria of the deal though will exempt some investors. Foreign Exchange Strong UK manufacturing PMI data this morning, best in 3 years, has helped GBP regain some lost ground as it heads back towards 1.29. Trading relatively subdued, JPY the weaker of the G7 units as sentiment stays upbeat. EM currencies holding their own, to note is a move in USD/NGN as the official rate moves higher close to 325, FX window prices at 380. EUR/USD support 1.0900 1.0880 resistance 1.0945 1.0960 GBP/USD support 1.2860 1.2835 resistance 1.2920 1.2960 Economic Indicators Area EC UK EC Data Markit Eurozone Manufacturing PMI Markit UK PMI Manufacturing SA Unemployment Rate Date Apr Apr Mar Previous 56.8 54.2 9.4% Expected 56.8 54.0 9.4% Today's Tipples  Saudi Finance minister says " We are likely to tap international and local debt markets this year  U.K Manufacturing PMI posts 57.3 against 24.0 expected, highest in 3 years  IMF sees Dubai GDP growth accelerating, bolstered by local spending and a pick-up in local trade  Saudi Aramco now controls 100% of Port Arthur Oil refinery, largest refinery in U.S WWW.BACB.CO.UK
2. FX Markets Bond Markets GBP /USD EUR/USD USD/JPY GBP/EUR Close 1.2886 1.0899 111.84 1.1823 Today 1.2891 1.0914 112.21 1.1812 USD/CHF USD/MAD USD/TND USD/LYD USD / TRY USD/NGN USD/ZAR 0.9963 9.9177 2.4712 1.4134 3.5544 310.50 13.41 0.9942 9.9104 2.4687 1.4200 3.5382 315.50 13.3356 Close 51.52 5710.50 1256.58 16.86 1911.50 456.00 16.18 Today 51.85 5710.50 1255.15 16.99 1911.50 459.50 16.39 US 10 Year UK 10 Year GER 10 Year Today 2.33 1.11 0.34 Equity Markets FTSE 100 S&P 500 DOW JONES Euro Stoxx Nikkei Shanghai Comp Close 7203.94 2388.33 20913.46 3559.59 19310.52 3154.66 Today 7234.08 Ldn PM Ldn PM 3564.53 Closed Closed Commodities Brent Crude Copper Gold Silver Aluminium Wheat Sugar This document has been prepared for information purposes only and is issued by British Arab Commercial Bank plc (BACB). It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication only. It does not constitute or form part of and should not be construed as, an offer to sell or issue, or the solicitation of an offer to buy or acquire, securities in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Any information contained in this document does not take into account any particular investment objectives, or other financial situation which may be relevant to any particular investor to whom this information may be sent. As a result, investors using the information should assess whether it is appropriate in light of their own individual circumstances before acting on it. The information in this document is based on information obtained from sources believed by BACB to be reliable, but BACB does not represent or warrant, nor accepts responsibility, as to its completeness or accuracy. If you are to rely on the information you are strongly recommended to take your own independent advice. The information on which this document is based may change and BACB is under no obligation to update the information. Sources of information obtained from third parties are cited as appropriate. Copyright (c) British Arab Commercial Bank plc 2013, ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, or on any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of British Arab Commercial Bank plc. British Arab Commercial Bank plc Registered Office: 8-10 Mansion House Place, London EC4N 8BJ. Registered in England Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority - Firm Reference Number 204564 WWW.BACB.CO.UK