FX & Markets Weekly

Week 16/2017

Mag. Ahmet Hüsrev BILGIN Senior Economist Vienna, Austria

BIST rises to 4-year high Following the referendum, Turkish stocks were back in demand as the benchmark BIST100 index climbed by 2,82% since the outcome. 91 stocks gained, and only 7 lost since referendum day. Leaders were Sasa Polyester (+13,15%), Aselsan (+11,49%), and Banvit (+10,57%). Laggers were Polisan (-6,56%), Do&Co (-2,12%), and Ayen Enerji (-1,45%). Already in the first week of April the lead index of the Borsa Istanbul had climbed above its final hurdle, the 50-day simple moving average around 89600 points. This week it rose to its highest since May 2013 and is targeting now its all-time high of 93178 points. The trend-following momentum indicator MACD is still pointing upwards, and the RSI doesn’t signal overbought condi- tions yet, so the rally has still room to go.

GBP rises on UK snap elections UK Prime Minister Theresa May blamed it on political game playing and division in Westminster as she called early elec- tions in UK as of June 8, 2017. She was concerned that having an election scheduled for 2020 would give EU negotiators op- portunity to exploit political weakness on UK side. Strong GBP demand saw traders unwind long-held Sterling shorts as the GBP rose vs all of its G10 peers. The other day, we saw a major breakthrough for GBP that managed to clear key resistance levels across the board. Most importantly it cleared the Febru- ary high at 1,2707 in Cable and the February low at 0,8401 in EUR/GBP which opened additional recovery potential to 1,3187 (38.2 % Fibonacci retracement) in Cable and to 0,8168 (50 % of the 2015-2016 rally) in EUR/GBP. At the same time UK stocks fell another week (FTSE100 -3,16%), but gilts were unimpressed as the sovereign yield curve remained nearly unchanged week to date.

CAC40 prices in uncertain French vote French benchmark stock market index CAC40 fell a second consecutive week as the 1st round of French presidential elec- tions will be on Sunday. Market driving news were the chang- ing 1st round voting intention estimates in polls. Surprising was also the flash manufacturing PMI release. It rose above 55 points which is a 72-month-high, and is marking its 7th consecu- tive month of expansion. Chart-technically the index is close to but still above its 50-day simple moving average around 4989 points. Historically, June is the month when the CAC40 corrects the most. In 9 of the past 10 years at least, it did. In 4 years out of these the correction already started in May.

Exchange Price as of Change % Change % Change % Commodities Price as of Change % Change % Change % Rates 04/21/2017 5 days 1 Month 3 Months Energy Futures 04/21/2017 5 days 1 Month 3 Months EUR/USD 1,0700 0,77 -1,01 -0,25 WTI crude 50,66 -5,56 3,69 -8,23 EUR/TRY 3,9035 -1,43 -0,59 -3,37 BRENT crude 53,01 -5,26 3,44 -7,01 EUR/CHF 1,0679 0,05 -0,54 -0,45 GAS oil 475,75 -4,57 4,39 -4,95 EUR/GBP 0,83693 -1,27 -3,36 -2,64 Heating oil 157,73 -4,47 4,34 -6,31 EUR/JPY 116,71 1,13 -3,40 -3,81 Natural gas 3,16 -2,08 0,16 -2,44 EUR/RUB 60,185 0,97 -3,38 -5,64 Gold Spot 1.282,58 -0,13 2,95 5,67 EUR/CNY 7,3684 0,70 -0,94 0,09 Silver Spot 17,95 -3,04 2,32 4,85 USD/TRY 3,6471 -1,72 0,42 -3,13 Platinum Spot 981,15 1,01 1,23 0,81 USD/JPY 109,08 0,35 -2,43 -3,57 Palladium Spot 803,96 0,86 2,01 4,19 USD/RUB 56,2493 0,21 -2,40 -5,41 Copper 255,50 -1,10 -2,90 -3,16 USD/CNY 6,886 0,01 -0,02 0,47 Stock Price as of Change% Change % Change % Sovereign Price as of Change % Change % Ask Indices 04/21/2017 5 days 1 Month 3 Months Bonds 10Y 04/21/2017 5 days 1 Month YTM ATX 2.856 -0,79 1,12 6,40 Austria 102,74 -0,33 1,89 0,44 BIST 100 92.631 2,81 2,20 11,47 Belgium 103,33 -0,54 1,60 0,62 CAC 40 5.072 -0,58 1,38 4,56 China 94,74 -0,93 -1,20 3,40 DAX 12.073 -0,69 0,91 3,79 EFSF 117,55 -0,20 0,35 -0,17 Dow Jones (T-1) 20.579 -0,06 -0,43 3,79 ESM 114,00 na 0,91 -0,03 Euro Stoxx 50 3.450 -0,55 0,57 4,54 France 94,41 0,55 2,34 0,85 FTSE 100 7.126 -3,01 -3,40 -0,98 Germany 98,51 -0,44 2,17 0,16 HANG SENG 24.042 -1,12 -2,24 5,05 Greece 81,09 0,27 6,25 6,52 IBEX 35 10.408 0,44 1,91 10,94 Japan 101,04 -0,09 0,48 -0,02 MICEX 1.951 1,86 -4,69 -9,63 Portugal 95,53 0,90 3,74 3,42 NASDAQ 100 (T-1) 5.444 1,24 2,08 7,51 Spain 97,82 0,26 1,41 1,53 NIKKEI 225 18.621 1,56 -4,29 -2,70 Russia 103,95 1,40 1,56 7,71 S&P 500 (T-1) 2.356 0,47 0,50 3,72 Switzerland 114,18 0,10 1,62 -0,31 Interest Rate Price as of Change% Change % Change % Turkey 101,30 2,27 1,22 10,89 Futures 04/21/2017 5 days 1 Month 3 Months UK 104,60 0,05 1,79 0,97 Bobl 132,22 -0,28 0,85 0,91 US 97,97 0,07 na 2,23 Bund 162,80 -0,27 2,04 2,30 Turkey Price as of Change % Change % Change % Risk Price as of Change % Change % Change % related 04/21/2017 5 days 1 Month 3 Months Sentiment 04/21/2017 5 days 1 Month 3 Months TRY Basket 3,775 -0,69 -0,13 -3,28 Baltic Dry Index (T-1) 1.243 -6,32 3,58 34,38 WAC of CBRT (T-1) 11,48 0,00 1,59 25,88 VIX 15,96 -11,78 12,91 22,01 Gold TRY / gram 150,39 -1,86 3,37 2,62 Turkey 5Y CDS (T -1) 231,102 -1,23 -0,79 -15,91 TR Gov. B. 2Y yield 11,15 -2,71 -3,21 -1,68 MSCI EM Index (T-1) 958,45 -0,21 -1,50 7,30 Euribor/Eonia Price as of Change % Change % Change % USD Libor Price as of Change % Change % Change % 04/21/2017 5 days 1 Month 3 Months 04/21/2017 5 days 1 Month 3 Months Eonia (T -1) -0,358 0,00 -2,29 -1,99 USD Libor O/N (T-1) 0,929 0,36 0,44 35,03 Euribor 1 Month -0,371 0,27 0,80 0,27 USD Libor 1M 0,991 -0,39 1,37 27,77 Euribor 3 Month -0,331 0,00 -0,61 -0,92 USD Libor 3M 1,156 -0,19 0,00 10,81 Euribor 6 Month -0,249 -1,22 -3,32 -3,32 USD Libor 6M 1,402 -0,08 -2,21 3,23 Euribor 12 Month -0,124 -3,33 -16,98 -24,00 USD Libor 12M 1,745 -1,54 -3,90 0,67 EUR Libor Price as of Change % Change % Change % TRY Libor Price as of Change % Change % Change % 04/21/2017 5 days 1 Month 3 Months 04/21/2017 5 days 1 Month 3 Months EUR Libor O/N -0,424 0,00 0,10 -3,31 TRY Libor O/N 12,019 -0,00 0,87 21,82 EUR Libor 1M -0,400 -2,19 -1,63 -4,48 TRY Libor 1M 12,040 0,00 0,14 19,11 EUR Libor 3M -0,362 -1,20 -1,81 -6,29 TRY Libor 3M 12,246 0,02 1,27 14,36 EUR Libor 6M -0,259 -1,11 -4,91 -7,90 TRY Libor 6M 12,299 0,01 0,85 11,11 EUR Libor 12M -0,145 -7,42 -30,71 -50,52 TRY Libor 12M 12,643 -0,08 0,63 8,69

Date Time Country Economic Release Period Consensus Actual Prior 04/17/2017 14:30 US Empire Manufacturing Apr 15.0 42771 42841 04/17/2017 16:00 US NAHB Housing Market Index Apr 70 68 71 04/17/2017 22:00 US Total Net TIC Flows Feb -- $19.3b $110.4b 04/17/2017 22:00 US Net Long-term TIC Flows Feb -- $53.4b $6.3b 04/18/2017 14:30 US Housing Starts Mar 1250k 1215k 1288k 04/18/2017 14:30 US Housing Starts MoM Mar -3.0% -6.8% 3.0% 04/18/2017 14:30 US Building Permits Mar 1250k 1260k 1213k 04/18/2017 14:30 US Building Permits MoM Mar 2.8% 3.6% -6.2% 04/18/2017 15:15 US Industrial Production MoM Mar 0.5% 0.5% 0.0% 04/18/2017 15:15 US Capacity Utilization Mar 76.1% 76.1% 75.4% 04/18/2017 15:15 US Manufacturing (SIC) Production Mar 0.0% -0.4% 0.5% 04/19/2017 13:00 US MBA Mortgage Applications Apr 14 -- -1.8% 1.5% 04/20/2017 14:30 US Initial Jobless Claims Apr 15 240k 244k 234k 04/20/2017 14:30 US Continuing Claims Apr 8 2024k 1979k 2028k 04/20/2017 14:30 US Philadelphia Fed Business Outlook Apr 42880 22.0 32.8 04/19/2017 08:00 EA EU27 New Car Registrations Mar -- 11.2% 2.2% 04/19/2017 11:00 EA Trade Balance SA Feb 18.0b 19.2b 15.7b 04/19/2017 11:00 EA Trade Balance NSA Feb 16.2b 17.8b -0.6b 04/19/2017 11:00 EA CPI MoM Mar 0.8% 0.8% 0.4% 04/19/2017 11:00 EA CPI YoY Mar F 1.5% 1.5% 1.5% 04/19/2017 11:00 EA CPI Core YoY Mar F 0.7% 0.7% 0.7% 04/20/2017 11:00 EA Construction Output MoM Feb -- 6.9% -2.3% 04/20/2017 11:00 EA Construction Output YoY Feb -- 7.1% -6.2% 04/20/2017 16:00 EA Consumer Confidence Apr A -4.8 -3.6 -5.0 04/21/2017 10:00 EA Markit Eurozone Manufacturing PMI Apr P 56.0 56.8 56.2 04/21/2017 10:00 EA Markit Eurozone Services PMI Apr P 55.9 56.2 56.0 04/21/2017 10:00 EA Markit Eurozone Composite PMI Apr P 56.4 56.7 56.4 04/21/2017 10:00 EA ECB Current Account SA Feb -- 37.9b 24.1b 04/21/2017 10:00 EA Current Account NSA Feb -- 27.9b 2.5b 04/17/2017 09:00 TR Unemployment Rate Jan 13.0% 13.0% 12.7% 04/17/2017 10:20 TR Central Gov't Budget Balance Mar -- -19.5b -6.8b 04/20/2017 09:00 TR Consumer Confidence Index Apr 65.00 71.30 67.80 04/20/2017 13:30 TR Foreigners Net Bond Invest Apr 14 -- $80m $487m 04/20/2017 13:30 TR Foreigners Net Stock Invest Apr 14 -- $173m $116m 04/17/2017 15:00 RU Industrial Production YoY Mar 1.1% 0.8% -2.7% 04/18/2017 15:00 RU Unemployment Rate Mar 5.6% 5.4% 5.6% 04/19/2017 15:00 RU PPI MoM Mar 0.6% -0.3% 0.8% 04/19/2017 15:00 RU PPI YoY Mar 12.5% 11.3% 15.1%

Should you have any queries, please contact me as follows: Mag. Ahmet Hüsrev BILGIN, Economic Research Tel: 0505105/2430 Email: [email protected]

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