Daily Observations:

Financial markets show signs of resilience following a failed coup attempt in Turkey, with the Turkish lira leading a recovery in EM currencies and Asian equities edging higher today. Safe haven assets including the yen and gold fell.


  • The S&P 500 Index slipped 0.1% to end the week up 1.5%.
  • Retail sales in June advanced 0.6% from a month earlier, beating the consensus estimate of 0.1%, however May’s 0.5% gain was revised down to 0.2%.
  • CPI climbed 0.2% month-on-month, less than the 0.3% expected. Core CPI, stripped of food and energy prices were 0.2% higher from May, matching estimates and the highest level since May 2012.
  • Industrial production rose 0.6% month-on-month, better than the 0.3% expected, and largely aided by a 2.4% jump in utilities output.
  • US PPI in June rose 0.5% from a month earlier, better than the 0.3% anticipated, with strong increases across most goods and services components and largely driven by higher costs for energy.
  • Other economic data saw New York manufacturing contract to 0.55 from 6.01 and University of Michigan sentiment fall from 93.5 to 89.5.
  • The US dollar closed broadly stronger last Friday, with the Bloomberg Spot Dollar Index rising 0.4%, driven by strong retail sales and industrial output data. The odds of the Fed increasing rates by December more than doubled last week to 44%, Fed funds futures on Bloomberg showed.


  • Manufacturing sales in May fell 1.0% from a month earlier, more than the 0.8% decrease predicted.


  • An attempted military coup erupted last Friday, sending the lira into its sharpest nosedive in 8 years. Although the coup failed, it left at least 290 dead and 1,400 injured, and resulted in the arrests of 6,000 people including generals and judges.
  • The Turkish central bank has promised unlimited liquidity to lenders and measures to support the lira in order to prevent a massive sell-off.


  • Retail sales in May, released last Friday, jumped 3.0% from a year earlier, roundly beating the consensus estimate of 1.9%.
  • Non-oil domestic exports for June, which was announced earlier today, fell 2.3% year-on-year, better than the 3.0% drop expected but falling sharply from the 11.6% gain last month.
  • Singapore’s bad loan measure rose to 2.25% in 2015, the highest since 2009, as more companies struggle to meet the terms of their debt.
  • Ausgroup Ltd. And Otto Marine Ltd. Are among 10 Singapore-listed firms that have started a process to loosen bond vows this year, up from 8 in 2015, according to data compiled by Bloomberg. This includes efforts to extend the maturity of debt and loosen covenants requiring companies to maintain certain leverage levels.


  • China home sales rose in June at the slowest pace this year, while new home prices increased in 55 cities, as compared to 60 in May.

Precious Metals:

  • Spot gold posted its first weekly drop in seven, falling 2.1% for the week as investors began to turn their attention to riskier assets like equities. The major uptrend remains strong; the $1,310/Oz level is expected to provide significant support.
  • In an email to clients, DBS Group commented gold is in a major bull market and may surge to more than $1,500/Oz as low interest rates buoy demand and the US presidential election looms.
  • Spot silver posted a 0.2% decline for the week ended last Friday, and is currently testing the psychological $20/Oz level. The next support level resides at around $18.50/Oz.



  • Spot 1.3485
  • USDSGD was largely unchanged earlier today, recovering from the lows near 1.34000 reached last Friday morning.
  • The support at 1.34000 remains significantly strong.



  • Spot 0.7595
  • AUDUSD posted a decline of 0.9% to 0.7578 last Friday, retreating back below the previous resistance region of 0.7600 – 0.7650.
  • The decline was largely due to a stronger greenback.



  • Spot 1.2944
  • Stronger US economic data helped to reverse USDCAD losses on Friday, and trim its weekly loss to 0.5%.
  • To the downside, the resistance of 1.2832 should provide some medium-term support.



  • Spot 6.7045
  • Offshore yuan fell to its weakest level since 7th Jan this year on Friday – 6.7195.
  • Onshore yuan, earlier today, weakened to 6.6995, the lowest Oct 2010.
  • The PBOC lowered its daily fix rate by 0.2% to 6.6961 this morning.



  • Spot 1.3238
  • GBPUSD rebounded off the 1.3500 handle on Friday, partly due to a stronger greenback following strong economic data from the US.
  • On a longer-term basis, the pound is still on course to weaken further despite the BOE unexpectedly holding rates steady last week, as many uncertainties still loom over the details of Brexit.
  • Prime Minister Theresa May has signaled she will wait until 2017 before triggering the formal EU exit procedure, hence affecting companies’ investment decisions and potentially introducing delays that could last for months. Meanwhile consumer confidence may be hurt by the lingering political instability. In addition, the BOE could potentially introduce a raft of stimulus measures soon which would result in a weaker pound.
  • According to the median estimate on the top 10 FX forecasters on Bloomberg, sterling will slump to almost 4% by year-end to $1.27.


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UEN: 201419754M

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