Economic Daily

Brought to you by Phillip Futures Pte Ltd (A member of PhillipCapital)

2 January 2019

IMPORTANT ECONOMIC DATA RELEASE TODAY

Economic data is an important factor that will have an impact on market direction. There are a number of economic figures
releases daily. Below are some important data to watch out for, which would have impact to today’s market.
No Time Event Actual Forecast Previous

1.1 08:00 Singapore Primary GDP (QoQ) (Q4) 1.6% 3.6% 3.0%
1.2 08:00 Singapore Primary GDP (YoY) (Q4) 2.2% 2.5% 2.2%
2 09:45 China Caixin Manufacturing PMI (Dec) 49.7 50.2 50.2
3 17:00 Eurozone Manufacturing PMI (Dec) - 51.4 51.4
4 17:30 UK Manufacturing PMI (Dec) - 52.6 53.1
5 22:45 US Manufacturing PMI (Dec) - 53.9 53.9
Source: Bloomberg/ Phillip Futures
Market Update (Fundamentals):
1) US stock index futures: Opened lower as concerns about global economic growth weigh
Prices as at 10.30am:
Mini Dow Futures: -0.66%
Mini S&P 500 Futures: -0.63%

 US indices futures generally started the New Year lower, as concerns about global economic growth and a more
turbulent year ahead continues to weigh on markets. US President Trump's possible olive branch to break the
stalemate in government shutdown also failed to lift markets. It was reported that President Trump invited the top
congressional leaders from both parties to a White House briefing on border security happening later today, and
suggested he wants to “make a deal” to end the government shutdown. Should the shutdown eventually conclude, it
could hopefully bring back some confidence to US indices. Nevertheless, in our opinion, this year appears gloomier
as compared to last year, and the profit taking mentality that was apparent during the past few weeks is expected to
carry on into the new year. In fact, many international bodies have already issued warnings of a slowing global
economy, due to the backdrop of trade tariffs and protectionism policies. Hence, in view of a more volatile year ahead,
more risk adversity is expected in US indices.

 The trend for the mini S&P 500 futures is turning bearish, with prices below the 20 and 40 SMA on the hourly chart.
The immediate resistance at 2550 and immediate support at 2420.

2) Asian stock index futures: Falls as negative data dampens the Holiday cheer

Prices as at 10.30am:
FTSE China A50 Futures: -1.30%
MSCI Singapore Free Index (SiMSCI) Futures: -0.57%

 FTSE China A50 Futures slumped today, after Caixin PMI results confirm that factory activity has shrunk for first time
in 19 months. Domestic and export orders are shown to continue weakening, which validates concerns over the
slowing domestic economy and the implications of the US trade tariffs. This points to a rocky start for the world’s
second-largest economy. The weak result, is in line with the official PMI numbers, and shows that new order are falling
as well, with companies reporting subdued demand despite some price discounting. With trade talks between US and
China progressing in the right direction, coupled with more government support, such as looser monetary policy and
more cuts in taxes and fees, only time could tell if these stimulus will be sufficient to revitalise the Chinese economy.
Nonetheless, during his New Year Speech, Chinese President Xi stated that the pace of reform in China will continue,
and that it will open its doors wider to other nations. This could signal that China wants to improve market access,
which would give more upside potential for the FTSE China A50 Futures.

Written By: Samuel Siew

Rep No.: SWE300299240
Phone: (65) 6531 5474 Please carefully read the important disclosures at the end of this publication.
Email: samuelsiewwe@phillip.com.sg
pfpl_commentaries@phillip.com.sg
 Economic Daily

 The trend for the FTSE China A50 Futures is bearish, with prices below the 20, 40, 100 and 200 SMA on the hourly
chart. The immediate resistance is at 10460, and immediate support is at 10175.

 SiMSCI Futures fell this morning, along with most Asian indices. This is after generally poor Asian economic data
reported wavered market confidence. In addition, the advanced GDP numbers also shows that growth have
moderated further, and have fallen below expectations. Singapore, which is traditionally trade-dependent have begun
facing headwinds from slowing factory orders in the Asian region, as they get hit by the US-China trade war and a
fading technology boom. The contraction in manufacturing would also mean that there is more downside risk for our
export-reliant economy. Thus, SIMSCi futures would face more downside pressure, as market negativity increases.

 The trend is bearish, with prices trending below the 20, 40, 100 and 200 EMAs on the hourly chart. The immediate
resistance will be at 343.5 and immediate support at 335.5.

3) Euro Currency: Remains buoyant as uncertainty quells in the Eurozone

 The EUR remains buoyant, as uncertainty quells in the Eurozone. Italian Deputy Prime Minister Matteo Salvini
assured the public that he “did not see any danger” to the government in the coming months as it focuses on new
reforms after finally pushing its 2019 budget into law. This addresses the concern of the Italian coalition breaking up
due to the ruling parties being divided over an array of issues. Thus, with the overvalued USD acting as a strong
rhetoric for the EUR coupled with the easing political uncertainties in the EU, further strength in the EUR is expected.
However, we are of the view that the gains may be capped. The ECB has trimmed growth, inflation forecasts for this
year, as the growth in the Eurozone has slowed down more than expected in recent quarters. Lacklustre recent
economic data, such as PMI reading from France and Germany and Eurozone’s inflation rate, further confirms the
sluggish Eurozone growth. Tonight, eyes will be towards the manufacturing PMI numbers. Should it show
confirmation that growth in the Eurozone has continued to ease, it could ascertain the ECB’s fears. In addition, the
French economy is also expected to slow drastically in the last quarter of 2018, with the continuous weeks of protest,
which has damped market confident and deterred tourists. In fact, the French protest have been carried out for seven
continuous weekends, which would imply greater economic implications. Therefore, with impending headwinds
present, it could limit the strength of the EUR.

 The EUR/USD pair is bullish on the hourly chart, with prices above the 20, 40, 100 and 200 EMA. The immediate
resistance is at 1.1494, while its immediate support is at 1.1418.

4) Pound Sterling: Remains battered by Brexit woes

 Market confidence towards the GBP remains weak, as less than 3 months remaining until the Brexit deadline. UK
Prime Minister Theresa May, who is facing deep opposition from both her own lawmakers and opposition parties with
regard to the Brexit agreement she has negotiated with the EU, has increased the pessimism of a hard Brexit
outcome. In fact, during the New Year Day message, PM May once again appealed to ministers to back her plan
during the parliamentary vote, which will take place in approximately 2 weeks. This will be pivotal for the world’s fifth-
largest economy, as it will determine if the UK will have a managed exit and retain relatively close economic ties with
the EU, or face massive uncertainty after Brexit. The government’s next steps for Brexit also seem limited, and this
raises the possibility of further harming the economy in the scenario of an undesired hard Brexit outcome. The UK will
finally be back for the festive holidays, and more chaos could emerge as ministers are expected to comment on
Brexit situation once again, resulting in the GBP being news driven. Therefore, until this Brexit deadlock is broken,
the GBP could face further weakness, especially with economic numbers expected to disappoint.

 The GBP/USD pair is turning bearish once again on the hourly chart, with prices trending below the 20 EMA. The
immediate resistance is at 1.2747, while its immediate support is at 1.2680.

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 Economic Daily

5) US Dollar: Eased as safe-haven allure fade

 The dollar eased against most major counterparts this morning, optimism in the progress of Sino-US trade ties hurt
the safe-haven allure for the USD. In addition, cautious trading was observed, as the partial government shutdown in
the US persist, continuing for more than a week, which is expected to negatively impact the US economy. Going
forward, there will be wider concerns about the slower pace of Fed rate hikes, which will weigh on the USD. Thus far,
the Fed has maintained a more cautious outlook for rate hikes in 2019, due to recent slowdown in economic numbers
and interest rate nearing "neutral". Therefore, the subdued outlook toward US interest rates and its economy would
continue to weigh on the USD strength. In fact, the Fed had recently sent a strong signal that it would be willing to
reconsider expected interest rate hikes amid new data showing President Trump's multi-front trade wars have been a
drag on the economy and shaking up investors, and had reduced its 2019 projections for interest rates and economic
growth. Moreover, US interest rate futures are indicating about one rate hike in 2019, and a reduction in interest rates
in 2020, which shows bearishness in the market. It is noted that the risk aversion in markets did not have much
impact on the USD as well, as it instead helped boost other safe haven currencies like the JPY and CHF. This shows
that the lacklustre outlook in the dollar may have temporary cause investor to seek shelter elsewhere.

 Current prices for the USD/JPY pair is bearish on the hourly chart, with prices below the 20, 40, 100 and 200 EMA.
Its immediate resistance is at 109.86, and its immediate support is at 109.25.

Technical Chart pick of the day:

USD/JPY – Bearish

 On a technical perspective, the trend is bearish, with prices below the 20, 40, 100 and 200 EMA.
 Prices failed to break above the 40 EMA and retraced. This indicates that selling pressure is present.
 The downtrend line is intact, and prices are expected to face strong resistance at the downtrend line
 Based on the pivot point analysis, prices are currently below the pivot level. This signifies bearishness.

Resistance: R1: 110.169, R2: 110.779, R3: 111.696

Support: S1: 109.252, S2: 108.945, S3: 108.028

USD/JPY Hourly Chart

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 Economic Daily

Economic Calendar
Date Time Economic Release Period Survey Actual Prior Revised
United States
12/31 23:30 Dallas Fed Manf. Activity Dec 16 -- 17.6 --

01/02 22:45 Markit US Manufacturing PMI Dec F 53.9 -- 53.9 --

01/03 20:00 MBA Mortgage Applications Dec-28 -- -- -- --

01/03 21:15 ADP Employment Change Dec 180000 -- 179000 --

01/03 21:30 Initial Jobless Claims Dec-29 -- -- 216000 --

01/03 21:30 Continuing Claims Dec-22 -- -- 1701K --

01/03 22:45 Bloomberg Consumer Comfort Dec-30 -- -- 59.4 --

01/03 23:00 Construction Spending MoM Nov 0.30% -- -0.10% --

01/03 23:00 ISM Manufacturing Dec 58 -- 59.3 --

01/03 23:00 ISM Prices Paid Dec 57.8 -- 60.7 --

01/03 23:00 ISM New Orders Dec -- -- 62.1 --

01/04 21:30 Change in Nonfarm Payrolls Dec 180000 -- 155000 --

01/04 21:30 Two-Month Payroll Net Revision Dec -- -- -- --

01/04 21:30 Change in Private Payrolls Dec 185000 -- 161000 --

01/04 21:30 Change in Manufact. Payrolls Dec 23000 -- 27000 --

01/04 21:30 Unemployment Rate Dec 3.70% -- 3.70% --

01/04 21:30 Average Hourly Earnings MoM Dec 0.30% -- 0.20% --

01/04 21:30 Average Hourly Earnings YoY Dec 3.00% -- 3.10% --

01/04 21:30 Average Weekly Hours All Employees Dec 34.5 -- 34.4 --

01/04 21:30 Labor Force Participation Rate Dec -- -- 62.90% --

01/04 21:30 Underemployment Rate Dec -- -- 7.60% --

01/04 22:45 Markit US Composite PMI Dec F -- -- 53.6 --

01/04 22:45 Markit US Services PMI Dec F 53.5 -- 53.4 --

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Date Time Economic Release Period Survey Actual Prior Revised

Japan
01/04 8:30 Nikkei Japan PMI Mfg Dec F -- -- 52.4 --

United Kingdom
01/02 17:30 Markit UK PMI Manufacturing SA Dec 52.5 -- 53.1 --

01/03 17:30 Markit/CIPS UK Construction PMI Dec 52.9 -- 53.4 --

01/04 8:01 BRC Shop Price Index YoY Dec -- -- 0.10% --

01/04 15:00 Nationwide House PX MoM Dec 0.10% -- 0.30% --

01/04 15:00 Nationwide House Px NSA YoY Dec 1.50% -- 1.90% --

01/04 17:30 Net Consumer Credit Nov 1.0b -- 0.9b --

01/04 17:30 Net Lending Sec. on Dwellings Nov 4.0b -- 4.1b --

01/04 17:30 Mortgage Approvals Nov 66000 -- 67100 --

01/04 17:30 Money Supply M4 MoM Nov -- -- 0.70% --

01/04 17:30 M4 Money Supply YoY Nov -- -- 1.00% --

01/04 17:30 M4 Ex IOFCs 3M Annualised Nov -- -- 2.30% --

01/04 17:30 Markit/CIPS UK Services PMI Dec 50.7 -- 50.4 --

01/04 17:30 Markit/CIPS UK Composite PMI Dec 50.8 -- 50.7 --

01/04 17:30 Official Reserves Changes Dec -- -- $534m --

Eurozone
01/02 17:00 Markit Eurozone Manufacturing PMI Dec F 51.4 -- 51.4 --

01/03 17:00 M3 Money Supply YoY Nov 3.80% -- 3.90% --

01/04 17:00 Markit Eurozone Services PMI Dec F 51.4 -- 51.4 --

01/04 17:00 Markit Eurozone Composite PMI Dec F 51.3 -- 51.3 --

01/04 18:00 PPI MoM Nov -0.20% -- 0.80% --

01/04 18:00 PPI YoY Nov 4.20% -- 4.90% --

01/04 18:00 CPI Core YoY Dec A 1.00% -- 1.00% --

01/04 18:00 CPI Estimate YoY Dec 1.80% -- 2.00% --

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 Economic Daily

Date Time Economic Release Period Survey Actual Prior Revised

Singapore
12/31 10:00 Credit Card Bad Debts SGD Nov -- -- 27.2m --

12/31 10:00 Credit Card Billings SGD Nov -- -- 5307.3m --

12/31 10:00 Bank Loans and Advances YoY Nov -- -- 3.40% --

12/31 10:00 Money Supply M2 YoY Nov -- -- 3.00% --

12/31 10:00 Money Supply M1 YoY Nov -- -- 0.50% --

01/02 8:00 GDP SAAR QoQ 4Q A -- -- 3.00% --

01/02 8:00 GDP YoY 4Q A -- -- 2.20% --

01/02 URA Private Home Prices QoQ 4Q P -- -- 0.50% --

01/03 21:00 Purchasing Managers Index Dec -- -- 51.5 --

01/03 21:00 Electronics Sector Index Dec -- -- 49.9 --

01/04 8:30 Nikkei Singapore PMI Dec -- -- 53.8 --

China
12/31 9:00 Non-manufacturing PMI Dec 53.2 -- 53.4 --

12/31 9:00 Manufacturing PMI Dec 50 -- 50 --

01/02 9:45 Caixin China PMI Mfg Dec 50.2 -- 50.2 --

01/04 9:45 Caixin China PMI Composite Dec -- -- 51.9 --

01/04 9:45 Caixin China PMI Services Dec 53 -- 53.8 --

India
01/02 13:00 Nikkei India PMI Mfg Dec -- -- 54 --

01/04 12:30 Nikkei India PMI Services Dec -- -- 53.7 --

01/04 13:00 Nikkei India PMI Composite Dec -- -- 54.5 --

Australia
12/31 8:30 Private Sector Credit MoM Nov 0.30% -- 0.40% --

12/31 8:30 Private Sector Credit YoY Nov 4.40% -- 4.60% --

01/02 6:00 CBA Australia PMI Mfg Dec F -- -- 53.7 --

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 Economic Daily

01/02 7:00 CoreLogic House Px MoM Dec -- -- -0.90% --

01/04 6:00 CBA Australia PMI Services Dec F -- -- 52.2 --

01/04 6:00 CBA Australia PMI Composite Dec F -- -- 52.4 --

New Zealand
- - - - - - - -

Source: Bloomberg/ Phillip Futures

Note: Releases highlighted in red denote indicators which are deemed by the analyst to potentially cause significant market movements

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 Economic Daily

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 Economic Daily

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