Equities, commodities and treasuries fall

20 May, 2016

Equities, commodities and treasuries fall

In short, everything was falling as the fear of a June rate hike returned to the market. According to Bloomberg world interest rate probability, the implied chance of a June rate hike has climbed to 32% from 4% over the last two days.

Japan’s Nikkei 225 closed flat as JPY remained composed. The Hang Seng Index fell 0.67%, mainly weighted by the information technology sector. Tencent Holdings (700HK) fell 2.42% despite its Q1 earnings beating expectations. The company said uncertainty about China’s economic outlook may put pressure on its booming advertising business.

Singapore’s Straits Time Index lost 1.3%, with almost all sectors closing lower. Separately, Manulife US REIT is going to be listed on the SGX today. This deal offers local investors the rare exposure to the US office property market, and diversification in terms of both geographical and currency exposure. A yield projection of 6.6%-7.1% in 2016-17 is fairly attractive. The potential risks include foreign exchange risk, and limited upside from improving the occupancy rate which already stands above 96%. The success of this IPO would improve sentiment toward the IPO market in Singapore, and may attract more overseas players to look for listing opportunities on the SGX going forward.

FX
The dollar index was little changed overnight, the dollar rally stalling slightly after a recent surge. USD/JPY is trading just below 109.85 this morning. GBP/USD reached as high as 1.4660 on strong retail sales numbers although eased backed to the 1.4590 area later in the US session. A poll on Wednesday showed 55% of respondents in favour of staying in the EU, and thus eased worries of a Brexit.

USD/SGD consolidated around 1.3780 after a recent surge on a hawkish Fed and data which showed Singapore’s April non-oil exports shrank by 7.9% year on year. EUR/USD traded sideways overnight and remains around 1.1200. CHF/GBP continued to slide, reaching close to 0.6910. The immediate support and resistance markers are at Fibonacci levels of around 0.6815 and 0.6940 respectively.

Commodities
Crude oil came off from seven-month highs although pared losses later on supply disruption concerns in Nigeria and Canada. WTI crude oil futures closed at $48.16 last night. Wednesday’s US DoE report showed that oil inventories rose by 1.3 million barrels, higher than the market’s expectation of a 3 million cut. A stronger US dollar continued to extend pressure on commodities prices.  

Gold and silver prices tumbled on a stronger dollar. Gold is traded at $1,255 this morning, testing a key support level near to its 50-SMA, which is currently pointing toward the $1,250 area. Silver has broken through the key support level of $16.75 and is now trading at around $16.50 this morning.


Source link  
Banking sector remains a worry

In an absolutely stunning four day turnaround the FTSE100 has managed to post not only its lowest level in 4 months at the end of last week, but also its best close since April 21st as yesterday the UK main benchmark managed to reclaim all of its post Brexit losses...

Markets stabilise following two days of selling

Equity markets embraced the first rebound on Tuesday after two days of selling. The FTSE 100 and DAX indices both opened higher, finishing the day with 2.64% and 1.93% gains respectively...

Double ratings downgrade hits UK

It has been a torrid few days for equity markets and the pound in particular as it continues to plumb new multi-year lows against the US dollar, though we could get some respite today...


Yellen speech in focus after US payrolls miss

For most of last week, today speech by Fed chief Janet Yellen was being viewed through a lens of the timing potential for a June rate rise. This was largely down to some large scale expectations management by a raft of Fed officials in the lead up to Fridays May payrolls report...

OPEC meeting in the spotlight

Asian markets consolidated on the first trading day in June, as uncertainties surrounding the FOMC and Brexit started to dampen market optimism. The Chinese and HK markets both closed marginally lower on Wednesday due to mixed PMI data...

PMI data set to take centre stage

Equity markets continued to struggle for direction on both sides of the Atlantic last week, with the Dow posting its fourth negative week in a row and its worst losing streak since 2014, though the S&P500 did manage to eke out a weekly gain...

  


Share: