• In January, our clients were large USD sellers vs. CNY and MYR; large USD buyers vs. IDR, TWD, CNH
• Our custodian clients were sellers of USD vs. INR and CNY; buyers of USD vs. CNH, TWD and PHP
• Short USD positioning is large vs. KRW, INR and ...
We update our PCA for AXJ currencies; rise in US IP cycle is countered by the fall in China’s IP cycle
• Indonesia’s exports and trade balance have improved substantially, in contrast with recent IDR sell-off
• Widening MYR-USD rates spread shoul...
We expect further remittance growth on a recovery in global growth and post-typhoon reconstruction
• Our models therefore estimate c.2.0-2.5% more support in 2014 than in 2013
• We expect remittance growth to remain positive for GDP growth, curren...
We update our PCA for AXJ currencies; the rise in the global IP cycle should support AXJ FX in Q4
• We get positive PCA signals for TWD, PHP and IDR; neutral for other AXJ currencies
• We raise our short-term FX weightings on SGD and THB to Neut...
We see the Philippines as having the strongest fundamentals in Asia on growth, CA, fiscal consolidation
• Elevated NEER and equity outflows to weigh on TWD near-term
• Forward points, levels and seasonal factors make it attractive to sell TWD-PHP ...
SC FIRST gives direction, spread and relative-value signals for EM bonds
• We get a negative direction signal for EM bonds on fund outflows, bond selling and negative FX outlook
• New this month: We estimate EM-fund cash levels and flows to help o...
PCA confirms that growth is the key driver of AXJ currencies, followed by carry and USD-CNY fixings
• China’s IP cycle leads KRW, TWD, IDR and MYR; local IP cycle is important for INR and TWD
• Recent drop in global and local IP cycles to weigh o...
Recent weakness in Philippine data and potential further SDA adjustments to weigh on PHP near-term
• Rich valuations in the PHP and local asset markets to weigh on PHP in Q2
• We look to re-buy PHP in H2 when PHP appreciation should resume on stro...
The Post Today reported that the BoT may introduce a holding period for foreigners buying THB bonds
• We believe a price-based approach to FX measures would be less market-disruptive than quantity-based
• We take profit on our long 10Y THB positi...
Top 3 data/events
• Japan –Trade deficit likely continued in February
• UK – Retail sales may have crept up in February, but remain fragile
• US – The FOMC is expected to sit tight
• Market focus
• SCTF and SC FIRST suggest that positioning ...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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