Recent Search
Popular Searches
The Emirates NBD Purchasing Managers’ Index (PMI) for the UAE increased to 56.0 in July from 55.8 in June. New orders increased at a sharp rate in July, despite a decline in new export orders for the second month in a row. This suggests that domestic demand was robust last month. Saudi Arabia’s Emirates NBD PMI rose to 55.7 in July, the highest reading in three months. Output and new orders both increased at a faster rate in July compared with June. The rise in new orders is particularly encouraging given that new export orders declined marginally last month. Egypt’s Emirates NBD PMI rose marginally to 48.6 in July from 47.2 in June, remaining below the 50 mark separating expansion from contraction.
In a widely anticipated move, the Reserve Bank of India (RBI) cut repo rate by 25 bps to 6.0%. However, the central bank retained the neutral stance and reiterated that the incoming data will determine the future outlook. The central bank said that the ‘upside risks to inflation have either reduced or not materialized’ which in turn opened the room for easing. While the RBI retained the GVA forecast at 7.3%, it acknowledged the weakness in recent economic data and the need to ‘reinvigorate private investment’. The INR strengthened 0.6% to close below 64.0 level.
Egypt’s foreign exchange reserves have reached USD 36bn in July the highest since January 2011, from USD 31.3 billion in June according to data from the Central Bank of Egypt (CBE). Investment inflows reached USD 7.7bn while the country received USD 1.25bn, the 2nd trance of a USD 12bn loan from the International Monetary Fund.
Eurozone producer prices grew at their slowest pace this year, increasing 2.5% on the year in June against a rise of 3.4% in May and 4.3% in April. The June numbers were the lowest this year, and is a sign that inflationary pressures are easing, presenting a challenge for the European Central Bank as it plans to begin a gradual tightening of monetary policy by autumn.
.jpg)
Source: Emirates NBD Research
|
| Time | Cons |
| Time | Cons |
| EZ Markit Eurozone Composite PMI | 12:00 | 55.8 | Markit US Composite PMI | 17:45 | N/A |
| Bank of England Bank Rate | 15:00 | 0.25% | ISM Non-Manf. Composite | 18:00 | 56.9 |
| Bank of England Inflation Report | 15:00 | N/A | Factory Orders | 18:00 | 3.0% |
Source: Bloomberg.
It was a mixed session for US Treasuries after TBAC minutes release did not mention potential for ultra-long bond issuance. This helped 30y USTs with yields dropping 1 bps to 2.85%. However, the short end of the curve traded lower with yields on the 2y USTs rising 2 bps to 1.35% and on 5y USTs by 3 bps to 1.82%.
Activity in regional bonds continued to remain subdued with the yield on the Bloomberg Barclays GCC Credit and High Yield index remaining flat. The option adjusted spread, however, tightened by 2 bps.
The future issuance pipeline continues to build with Oman and Sharjah government setting up bond issuance programs. According to a report, the government of Sharjah has hired a bank to set up a USD sukuk programme with first issuance expected in Q4 2017. The current Sharjah 24s currently yield 3.1% while the Sharjah 21s yield 2.74%. Similarly, it is reported that Oman’s Ministry of Finance is seeking bond and loan proposals to raise USD 2bn to bridge the 2018 budget gap.
In emerging market, the Reserve Bank of India (RBI) cut repo rate by 25 bps to 6.0%. However, the central bank retained the neutral stance and reiterated that incoming data will determine the future outlook. The central bank said that the ‘upside risks to inflation have either reduced or not materialized’ which in turn opened the room for easing. The yield on 10y Indian Government bond rose marginally by 2bps to 6.46%.
AUD has underperformed this morning, softening against the other major currencies following softer than expected economic data. Data showed that the trade balance in June has narrowed from a revised figure of AUD 2024mn in May to AUD 856mn in June, missing out marked expectations of AUD 1800mn by almost AUD 1000mn.
As we go to print, AUDUSD trades 0.45% lower at 0.7932, down from daily highs of 0.7969. However, despite these declines, the daily uptrend that has been in effect since May 10th remains intact, with a sustained break below 0.7770 required to confirm the trend reversal.
Developed market equities traded slightly mixed. The S&P 500 index added +0.1% while the Euro Stoxx 600 index declined -0.4%. The sharp rise in the EUR seem to be weighing on European equities. It is worth noting that yesterday’s session marked the 70th consecutive trading session without a 1% gain for the S&P 500 index.
It was largely a positive day of trading for regional equities. The ADX index added +1.0% while the Qatar Exchange gained +0.6%. There was no major stock moves as investors continue to react to earnings announcements.
Oil prices recovered some of their previous session losses with Brent futures gaining +1.1% and WTI futures adding +0.9%. According to report from EIA, US crude output climbed by 20,000 barrels a day to 9.43mn a day. On the stockpiles front, Gasoline stockpiles fell by 2.52 million barrels to 227.7mn, the lowest since December. Crude inventories also dropped by 1.53 million barrels.
Emirates NBD Research