Norvik Research 10.02.2017

10/02/2017 17:41

Global developments

Risk appetite has been supported by Trump’s promise of a major US tax reform package over the next 2-3 weeks and a constructive outcome of the first conversation with his Chinese counterpart. 10-year US Treasury yields are up 2 bps at 2.41%, German 10-year yields are 2 bps higher from yesterday’s close at 0.33%. The dollar index is up 0.2% today after rising 0.4% yesterday. The pound sterling is down 0.4% against the dollar at 1.245 despite the stronger than expected industrial output, manufacturing and construction output data for December. S&P 500 futures are up 0.1% after gaining 0.6% yesterday. Iron ore prices jumped 3.5% today gaining about 9.5% since the start of the weak. Gold prices are down 0.3% while Bloomberg commodity index is 0.2% stronger.

China’s trade data for January point to a recovery in both domestic and external demand. Exports grew by 7.9% YoY in dollar terms against consensus of 3.2% YoY growth while imports jumped by 16.7% YoY against consensus of 10.0% YoY. Trade balance in January totalled $51.4bn, up from $40.8bn in December. Market sentiment has also been buoyed by the fact that Trump has reiterated the US government’s commitment to the “One-China” policy in his reportedly constructive discussion with President Xi. Asian equity markets are considerably stronger today, with China’s CSI 300 up 0.5% and Nikkei 225 jumping 2.5%.

Oil prices jumped today after the IEA report that OPEC producers have implemented over 90% of the agreed output cuts, the highest on record. Saudi Arabia, alongside with Qatar and Angola have reduced output in excess of their commitments. The IEA also further increased its estimates for world oil demand both for 2016 and 2017. Brent prices soared 1.4% on the publication of the IEA report and are currently 2% up on the day at $56.7/bbl.

Russia and CIS area developments and market colour

The rouble is 0.5% stronger today at 58.6 against the dollar. OFZ yields are 1-3 bps tighter today, following a similar daily change yesterday. Russia’s and Kazakhstan’s longer term sovereign bonds yields are without significant changes. Ukraine sovereign yields are 7-15 bps tighter. Azerbaijan-24 and Belarus-18 are 2 and 12 bps tighter, respectively.

For more information on the research, please click here.

Norvik Banka Research
+44 207 259 8854

Brokerage department
+371 6701 1561

This report is prepared by Norvik Banka UK Limited, of 46-48 Grosvenor Gardens, London, SW1W 0EB, United Kingdom (hereinafter referred to as the Company) as a marketing communication for information purposes only. Neither the information nor any opinion contained in this report (notwithstanding the source) is intended to be, or should be construed as an offer, a recommendation, an advice or an invitation to make an offer, to buy or sell any financial instrument. Information contained in this report constitutes neither investment nor tax advice and it does not take into account the specific investment objectives, risk appetite and financial situation of anyone who may receive this report. Investors should seek their own advice regarding the appropriateness of investing in any financial instrument discussed in this report and carefully evaluate the risks and eventual losses that are related to the investment services and its compliance with their investment goals.
Investors should note that any income derived from investments in financial instruments may fluctuate and that the price or value of securities and investments may rise or fall. Accordingly, investors may lose their investment or receive back less than originally invested. Past performance and income is not a guide to future performance and income. Foreign currency exchange rates may adversely affect the value, price or income of any security or related investment mentioned in this report. Investing in the Russian or CIS economies and securities involves a high degree of risk and requires appropriate knowledge and experience.
The information contained in this report have been obtained from such public sources what are believed to be reliable, but no representation or warranty is made by the Company with regard to accuracy. Therefore the information contained herein is subject to change without prior notice.
This report should not be viewed as the only source of information, and neither the Company, nor the companies within the NORVIK group and/or any affiliates or employees thereof accept any responsibility or liability whatsoever for any direct or indirect damage arising out of or in any way connected with the use of information contained herein, nor for its authenticity.
This report may not be distributed, copied, reproduced or changed without prior written consent from the Company. Further information, which for the avoidance of doubt cannot be treated as the recommendations and/or advice either, may be obtained from the Company upon request.
This report has not been prepared on the basis of the requirements of regulatory provisions promoting independence of investment research and is not subject to the prohibition from making transactions before disseminating investment research.
Norvik Banka Research is a Trading Name of Norvik Banka UK Ltd, which is Authorised and Regulated by the Financial Conduct Authority, FRN: 681329. Registered in England and Wales with number 08940522. Registered Office: 46/48 Grosvenor Gardens 1st Floor, London, SW1W 0EB.

The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. If you are not the recipient, you are hereby notified that any disclosure, copying, distribution or taking action in relation of the contents of this information is strictly prohibited and may be unlawful.

This email has been scanned for viruses and malware, and may have been automatically archived by Mimecast Ltd, an innovator in Software as a Service (SaaS) for business. Providing a safer and more useful place for your human generated data. Specializing in; Security, archiving and compliance. To find out more Click Here.

Latest news