Monthly Chartbook 10July13

7/28/2019 Monthly Chartbook 10July13

1/9

Wednesday, 10 July 2013

P.1

Rates

0,5

1

1,5

2

2,5

3

3,5

Swap Rates (%)

EUR 5Yr Swap Rate US 5Yr Swap Rate

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

EURIBOR3M

Today (09/07) J une Meeting (06/06) J uly Meeting (04/07)

FedcommentscontinuedtoraiseexpectationsthattheFedwillsoonstarttaperingQEpurchases.Thisexertedupward

pressureonswaprates.DovishECBpolicylimitsthedamage

forEUswaprates.

TheeuriborstripcurveshiftedagainloweraftertheJulyECBmeetingasECBDraghisoundedverydovishandsuggested

moreeasingmaybeforthcoming.

0

1

2

3

4

5

6

7

POLICY RATES

ECB FED BOE

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

EURIBOR 3M / USD LIBOR 3M

EURIBOR3M USD L IBOR 3M

TheECBintroducedforwardguidanceasatooltoeaseits

policy.MarioDraghisaidthecurrent50bpsrefirateshould

notbeconsideredabottom,suggestingthatratesmaybecut

again,includingthedepositrate.

Euribor3MandUSDLibor3Mremainatlowlevels,asECB&

Fedarefarfromraisingrates.ExcessliquidityinEurope

stabilizedaround275B.AccordingtoanECBstudyafall

below200BwouldexertupwardspressureonMMrates.

Markets


2/9


P.2

Currencies

1,2

1,25

1,3

1,35

1,4

1,45

1,5

EUR/USD

0,775

0,8

0,825

0,85

0,875

0,9

0,925

EUR/GBP

EUR/USDisnearingthe2013lowastheFedisactively

preparingascalingbackofpolicystimulation.Atthesame

time,theeurosuffersfromsoftECBguidance.

EUR/GBP:afragilebalanceofweaknessasboththeECBand

theBoEwillkeeppolicyaccommodativeintheforeseeable

future.Sterlingslightlyunderperforms.

0,00

0,50

1,00

1,50

2,00

2,50

3,00

2 3 4 5 6 7 8 9 10 11 12 15 20 25 30

Yield Curves

9/07/2013 9/06/2013 9/05/2013

050

100150200250300350400450500550600650

Semi-core Yield Spreads (10Yr)

Spain Italy Belgium France

Euroswap

curve

shifted

again

higher

under

influence

of

US

ratesandexpectationsofaturninFedpolicy.ECBtalk

mitigateupwardpressureandevenallowedtheshortendto

shiftlower.

Spreadsshowed

some

volatility,

but

given

the

prospect

for

anearlyFedtightening,thewideningremainedverylimited.


3/9


P.3

75

80

85

90

95

100

105

USD/JPY

24

24,5

25

25,5

26

26,5

EUR/CZK

USD/JPYrebounds.

The

USD

receives

support

from

higher

US

bondyields,butthe103.74reactiontoplooksahighhurdle.The

Czech

koruna

stays

near

the

recent

lows

against

the

euro.Globalrepositioningweighsonsmallercurrenciesand

domesticgrowthisalsoofnohelpforthekoruna.

255

265

275

285

295

305

315

325

EUR/HUF

3,8

4

4,2

4,4

4,6

EUR/PLN

EUR/HUF:The

forint

is

holding

stable

roughly

in

the

290/300

rangeevenastheNMBcontinuestograduallyreduceits

policyrate.

EUR/PLN:Polish

central

bank

indicates

that

the

rate

cut

cycle

hasprobablycometoanend.EUR/PLNshowscautioussigns

oftoppingoutbutfornowthegainsofthezlotyarelimited.


4/9


P.4

Others

240

260

280

300

320

340

360

380

CRB Commodity Index

CRB Commodity Index

210

230

250

270

290

310

Euro Stoxx 600

TheCRB

commodity

index

dropped

further

after

the

Fed

suggesteditmightsoonstarttaperingQE.Increasingsigns

thattheChineseeconomyisslowingaddedtodownward

pressure.EarlyJuly,theCRBindexpickedslightlyup.

Afterreaching

new

highs

in

May,

European

equities

dropped

sharplylowerinJuneastheFedconfirmeditsintentionto

soonstarttaperingitsassetpurchaseswhilealsouncertainty

inChinaweighedonsentiment.EarlyJuly,equitiesreversed

partoftheirlosses.

70

80

90

100

110

120

130

Brent Crude Oil

Brent Crude Oil (Future) - $/barrel

1100

1200

1300

1400

1500

1600

1700

1800

1900

Gold

Gold (Future) - $/ounce

BrentcrudeoilpricesfellbackaftertheFOMCmeeting,but

edgeduplaterinthemonth,partlyduetopoliticaltensionsin

Egypt.

GoldpriceswerefurtherhitaftertheFedconfirmedits

intentiontostarttaperingassetpurchases.Afterwards,gold

priceshoveredbetween$1200and$1250/ounce.


5/9


P.5

Eurozone

20

15

10

5

0

5

10

15

20

25

1

0

1

2

3

4

5

Euro zone Inflation

CPI - Y/Y (Left axis)

Core CPI - Y/Y (Left axis)

EC Industrial confidence - selling price expectations (Right axis)

7

8

9

1

11

1

-40

-30

-20

-10

0

10

Euro zone Unemployment

Services Confidence - Employment Expectations(Left axis)

Industrial Confidence - Employment Expectations (Left axis)

Unemployment Rate (R ight axis)

EurozoneCPIinflationpickedfurtherupinJune,risingfrom

1.4%Y/Yto1.6%Y/Y.Whileinflationremainssignificantly

belowtheECBs2%target,therecentuptickeasesfearsfor

undershootingthetarget.

Theeurozoneunemploymentrateisrisingtoevernew

highs.InMay,theunemploymentrateincreasedto12.1%.

Whiletheunemploymentratewillprobablyincreasefurther

inthecomingmonths,thereareindicationsthatSpanish

unemploymentisstabilizingathighlevels.

-3

-2

-1

0

1

2

3

Euro zone GDP (Q/Q contribution to growth)

government household gross fixed capital formation

change in inventories exports imports

GDP Q/Q

30

35

40

45

50

55

60

65

Euro zone PMI Manufacturing - Services

PMI Manufacturing PMI Services

Forasixthconsecutivequarter,eurozoneGDPcontractedat

thestartoftheyear,althoughataslowerpacethaninthe

fourthquarterof2012.Forthesecondquarter,expectations

arestillmixed.

TheeurozonePMIsimprovedfurtherinJune,ledbya

reboundinperipheralcountries.Boththemanufacturingand

servicesPMIremainhoweverbelowthe50benchmarklevel.

Economic Overview


6/9


P.6

-2

-1

0

1

2

PositiveSurprise

Negative

Surprise

Surpriseindex:measuresthedifference(instandarddeviations)betweenthe(median)Bloombergconsensusandtheactualoutcomeof

EMUeconomicdata.

InJuneandearlyJuly,almostalleurozoneeconomicdatasurprisedontheupsideofexpectations,providingfurther

evidencethattheeurozoneeconomyisontrackforareturntogrowthinthesecondhalfoftheyear.

-25

-20

-15

-10

-5

0

5

10

Euro zone Industrial Production

Industrial Production Y/Y

-5

-4

-3

-2

-1

0

1

2

Euro zone Retail Sales

Retail Sales Y/Y

Onamonthlybasis,eurozoneindustrialproductionrosefora

thirdconsecutivemonthinApril,supportedbydemandfrom

abroad.InMayhowever,industrialproductionisforecastto

haveweakened

led

by

adrop

in

German

production.

InMay,eurozoneretailsalespickedupby1.0%M/Masalso

consumersentimentimprovedsharply.Comparedwithlast

year,retailsalesaredownbyonlyamarginal0.1%.


7/9


P.7

US

-3

-2

-1

0

1

2

3

4

5

6

15

25

35

45

55

65

75

85

95

US Inflation

Manufacturing ISM - prices paid index (Left Scale) US CP I Y/Y (Right Scale)

US Core CPI Y/Y (Right Scale)

3

4

5

6

7

8

9

10

-900

-700

-500

-300

-100

100

300

US Unemployment

Change in private payrolls (Left Scale) US unemployment rate (Right Scale)

AfterasharpslowdowninMarchandApril,USCPIinflation

pickedupinMay,from1.1%Y/Yto1.4%Y/Y.Coreinflation

remainedunchanged,wellabovetheheadlinereading.

TheJunepayrollsreportsurprisedontheupsideof

expectations,showinganincreaseby195000andalsothe

previousfiguresweresignificantlyupwardlyrevised.The

unemploymentratehoweverstayedunchangedat7.6%.

-8

-6

-4

-2

0

2

4

6

US GDP (Q/Q Annualized - contribution to growth)

P ersonal Consumption F ixed Investments Change in inventories

Net Exports Government Consumption US GDP Q/Q Annualized

75

80

85

90

95

100

105

110

30

35

40

45

50

55

60

65

US PMI Manufacturi ng - Services

ISM non-manufacturing (Left Axis) ISM Manufacturing (Left Axis)

NFIB Small Business Optimism (Right Axis)

ThefinalreadingofUSQ1GDPshowedasubstantial

downwardrevisionto1.8%Q/Qannualized(from2.4%Q/Q).

Personalconsumptionremainsthemaingrowthdriver,while

governmentconsumptionactedasasignificantdrag.

USbusinessconfidenceindicatorsshowedamixedpicturein

June.ThemanufacturingISMedgedbackabove50,whilethe

nonmanufacturingISMweakenedunexpectedasdidsmall

businessconfidence,suggestingthatsentimentremains

fragile.


8/9


P.8

-20

-15

-10

-5

0

5

10

15

US Production

US Manufacturing Production Y/Y

-14

-9

-4

1

6

11

US Retail Sales

Retail Sales Y/Y

Comparedwith

the

previous

month,

US

industrial

production

stayedflatinMay,butmanufacturingproductionroseslightly

forthefirsttimeinthreemonths.Wehopetoseesome

improvementinthecomingmonthsasalsothemanufacturing

ISMpickedup.

USretail

sales

picked

up

in

May

led

by

strong

sales

of

motor

vehiclesandparts.Consumerspendingisexpectedtoremain

stronginthecomingmonthsafterconsumersentiment

improvedsharplyinthepreviousmonths.

-2

-1

0

1

2

3

Positive

Surprise

Surpriseindex:measuresthedifference(instandarddeviations)betweenthe(median)Bloombergconsensusandtheactualoutcomeof

USeconomicdata.

InJuneandearlyJuly,USeconomicdatasurprisedmostlyontheupsideofexpectations.Businessconfidenceindicators

weremixed,whilealsothedownwardrevisionoffirstquarterGDPwasdisappointing.


9/9


P 9

BrusselsResearch(KBC) GlobalSalesForcePietLammens +3224175941 BrusselsPeterWuyts +3224173235 CorporateDesk +3224174582JokeMertens +3224173059 CommercialDesk +3224175323MathiasvanderJeugt +3224175194 InstitutionalDesk +3224174625DublinResearchAustinHughes +35316646889 London +442072564848ShawnBritton +35316646892 Frankfurt +496975619372PragueResearch(CSOB) Paris +33153898315JanCermak +420261353578 NewYork +12125410697JanBures +420261353574 Singapore +655333410PetrBaca +420261353570BratislavaResearch(CSOB) Prague +420261353535MarekGabris +421259668809 Bratislava +421259668436WarsawResearch Budapest +3613289963BudapestResearchDavidNemeth +3613289989

ALLOURREPORTSAREAVAILABLEONWWW.KBCCORPORATES.COM/RESEARCHThisnonexhaustiveinformationisbasedonshorttermforecastsforexpecteddevelopmentsonthefinancialmarkets.KBCBankcannotguaranteethattheseforecastswillmaterializeandcannotbeheldliableinanywayfordirectorconsequentiallossarisingfromanyuseofthisdocumentoritscontent.Thedocumentisnotintendedaspersonalizedinvestmentadviceanddoesnotconstitutearecommendationtobuy,sellorholdinvestmentsdescribedherein.AlthoughinformationhasbeenobtainedfromandisbaseduponsourcesKBCbelievestobereliable,KBCdoesnotguaranteetheaccuracyofthisinformation,whichmaybeincompleteorcondensed.AllopinionsandestimatesconstituteaKBCjudgmentasofthedataofthereportandaresubjecttochangewithoutnotice.

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Monthly Chartbook 10July13

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