With U.S. President Trump vowing to push for a free trade partnership with Japan, and Saudi Arabia’s purge on anti-corruption, RAKBANK explain the affect on your money

 

Currencies

The dollar touched its highest level in nearly eight months versus the yen on Monday, supported by expectations for continued monetary policy divergence between the Federal Reserve and the Bank of Japan. The dollar rose to as high as 114.735 yen at one point, its highest since midMarch, its rise having gained added steam after breaching technical resistance at levels near 114.50 yen. Later, the dollar pared some of its gains and was trading at 114.35 yen, up 0.3% on the day. The Australian dollar huddled near four-month lows on Monday as investors wagered the country’s central bank would reiterate its neutral stance at a policy meeting this week following a run of soft domestic data. Sterling was also trading 0.6% up against the euro on Friday, after suffering its worst one-day drop on Thursday against the single currency since a “flash crash” on Oct. 7, 2016, when a sudden plunge briefly shaved a tenth off the pound’s value. the rand traded at 14.25 per dollar, 2.05% weaker than its overnight close of 13.97, accelerating its slide late in the session after U.S. manufacturing data beat estimates and lifted the greenback.

Treasuries/Rates

U.S. Treasury yields were little changed on Friday after the government’s jobs report for October showed that wages did not pick up in the month, raising some concerns about continuing low inflation, though recent hurricanes were seen as distorting the data. Benchmark 10-year notes gained 2/32 in price on the day to yield 2.343%, after falling as low as 2.323 immediately after the data. The yield curve between two-year notes and 10-year notes flattened to 71.1 basis points, the narrowest since late 2007.

Commodities/Energy

Gold held steady on Monday, but hovered near a one-week low hit in the previous session, as largely upbeat U.S. economic data reinforced the prospects of another rate hike by the Federal Reserve next month. Spot gold was nearly unchanged at $1,269.11 per ounce as of after edging lower earlier in the session. On Friday, the precious metal touched a one-week low of $1,265.16. U.S. gold futures for December delivery gained 0.1% to $1,269.80. Among other precious metals, spot silver inched 0.2% higher to $16.84 an ounce, platinum rose 0.4% to $921.80, while palladium was up 0.1% at $998.20. Oil prices hit their highest levels since July 2015 early on Monday as markets tightened, Brent futures, the international benchmark for oil prices, hit $62.44 per barrel early on Monday, their highest level since July 2015. Brent was at $62.27 per barrel at, up 20 cents, or 0.3% from the last close and 40% above June’s 2017 lows. U.S. West Texas Intermediate crude hit $56.00 per barrel in early trading, also the highest since July 2015, and was at $55.79, up 15 cents, or 0.3% from the last settlement. WTI is a third above its 2017 lows.

Global Equities

 

A surge in shares of heavyweight Apple helped push up major Wall Street indexes on Friday, as investors also assessed a mixed U.S. labor market report. The S&P 500 and Dow industrials recorded their eighth consecutive weeks of gains, while the Nasdaq posted its sixth straight up week, as equities have climbed to record highs. The Dow Jones Industrial Average rose 22.93 points, or 0.1%, to 23,539.19, the S&P 500 gained 7.99 points, or 0.31%, to 2,587.84 and the Nasdaq Composite added 49.49 points, or 0.74%, to 6,764.44. MSCI’s broadest index of AsiaPacific shares outside Japan slipped 0.7% to 552.8 from Friday’s top of 557.9 which was the highest since Nov. 2007. South Korea’s KOSPI fell 0.5%. Australian shares were off 0.1% but stayed within striking distance of a more than two-year peak set on Friday. Hong Kong’s Hang Seng Index skidded 1%. Japan’s Nikkei was a tad softer too but hovered around a 21-year peak.

Regional Updates

Saudi Arabia’s stock index rebounded to close higher on Sunday after initially falling steeply in response to a crackdown on corruption that led to the detention of dozens of prominent political and business figures. The Saudi stock index sank as much as 2.2% at one stage but recovered in the late afternoon to close 0.3% higher in active trade – with the help, one regional fund manager said, of government funds that deliberately intervened to support the market. Dubai’s stock index fell 1.0% as real estate-related shares dropped. Saudis are major investors in Dubai’s real estate market and a big crackdown on corruption could conceivably affect investment by them. Egypt’s index lost 1.0% as real estate firm Talaat Mostafa pulled back 4.3% in heavy trade, after surging on Thursday on the back of strong quarterly earnings.


This document is issued by RAK BANK, while all reasonable care has been taken in preparing this document; no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. Opinions, projections and estimates are subject to change without notice. This document is for information purposes only and for private circulation. It does not constitute any offer, recommendation or solicitation to any person to enter into transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movements in rates or prices or any representation that any such future movements will not exceed those shown in any illustration. Any investments discussed may not be suitable for all investors in any of the instruments or currencies mentioned in this document. You are advised make your own independent judgment with respect to any matter contained herein. In the UAE, RAK BANK conducts designated investment business only with Market Counterparties % Intermediate Customers and this document is directed only at such persons. Other persons should not rely on this document. Please call Santosh / Mahant / Imran / Rabia / Sunil +971-4-2913001 for FX/Deposit Rates.

 

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