WWRR Vol.2.015

More documents

Recommendations

Info

Christopher Wood christopher.wood@clsa.com +852 2600 8516 Figure 11 Indonesia 10-year government bond yield and rupiah/US$ 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 (%) Indonesia 10Y rupiah government bond yield Rupiah/US$ (RHS) 15,500 15,000 14,500 14,000 13,500 13,000 12,500 6.0 12,000 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17 Jan 18 Mar 18 May 18 Jul 18 Sep 18 Nov 18 Source: CLSA, Bloomberg Figure 12 Indonesia real GDP growth 6.5 (%YoY) Indonesia real GDP growth 6.0 5.5 5.0 4.5 4.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18 Source: CLSA, CEIC Data In both countries the risk is a renewed spike in oil but that, in GREED & fear’s view, is more a threat to the currencies than bond yields. Indeed the 4.2% and 4.5% appreciation of the rupee and rupiah in recent weeks has coincided with the correction in oil. Meanwhile the more stock markets fall and government bonds rally, the more likely the Fed signals that it is stepping back and, clearly, a sustainable rally in Asia requires an end to Fed tightening and, with it, the likely end of US dollar strength. But the best way to get the Fed’s attention quickly is not declining share prices but surging credit spreads. Weaker data, such as this week’s US housing data, will also help. The NAHB US Housing Market Index declined by 8 points to 60 in November, the lowest level since August 2016 and the biggest monthly decline since February 2014 (see Figure 13). While US building permits declined by 0.6% MoM and 6% YoY in October, the biggest YoY decline since June 2016 (see Figure 14). It is also increasing likely that core inflation has peaked, or is at least close to peaking. Core CPI inflation slowed to 2.1%YoY in October, down from 2.2% YoY in September and 2.4% YoY in July (see Figure 15). It is also worth noting that Federal Reserve vice chairman Richard Clarida said in a TV interview last Friday that interest rate policy is getting closer to neutral while there is some evidence of global slowing. Thursday, 22 November 2018 Page 6
Christopher Wood christopher.wood@clsa.com +852 2600 8516 Figure 13 US NAHB Housing Market Index 90 80 US NAHB/Wells Fargo Housing Market Index 70 60 50 40 30 20 10 0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: National Association of Home Builders (NAHB) Figure 14 US housing permits 1,400 (th, saar) US total housing permits (%YoY) 20 1,350 %YoY (RHS) 15 1,300 1,250 1,200 1,150 1,100 10 5 0 (5) 1,050 (10) 1,000 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 (15) Source: CLSA, US Census Bureau Figure 15 US core CPI inflation and core PCE inflation 3.0 (%YoY) US core CPI inflation Core PCE inflation 2.5 2.0 1.5 1.0 0.5 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jul 18 Source: CLSA, Bureau of Economic Analysis, Bureau of Labour Statistics Thursday, 22 November 2018 Page 7
Page 1 and 2:
07 th December 2018 What We Are Rea
Page 3 and 4:
Prudent Policy Mix Is the Anchor of
Page 5 and 6:
Steady Growth Expected in F2020 We
Page 7 and 8:
Exhibit 9: Cyclical Component of In
Page 9 and 10:
Exhibit 15: Saving Less Investment
Page 11 and 12:
Risks: Skewed to the Downside, Main
Page 13 and 14:
2019 Global Economic and Market Out
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Sep-09 Sep-10 Sep-11 Sep-12 Sep-13
Page 33 and 34:
Oct-08 Oct-09 Oct-10 Oct-11 Oct-12
Page 35 and 36:
Page 37 and 38: 2019 Global Economic and Market Out
Page 47 and 48: MNovember 21, 2018 08:05 PM GMT FOU
Page 49 and 50: M Story in Charts FOUNDATION Exhibi
Page 51 and 52: M FOUNDATION Free home delivery is
Page 53 and 54: M FOUNDATION This may have longer-t
Page 55 and 56: M FOUNDATION ...with an epic >US$0.
Page 57 and 58: M FOUNDATION Grocery models will ev
Page 59 and 60: M FOUNDATION Food for Thought Consu
Page 61 and 62: M FOUNDATION ..and key to success i
Page 63 and 64: M FOUNDATION Exhibit 18: Path to pr
Page 65 and 66: M Exhibit 20: Gross margin for groc
Page 67 and 68: M FOUNDATION Exhibit 23: Adoption o
Page 69 and 70: M Retail Model #3: The Hybrid Model
Page 71 and 72: M FOUNDATION Orders generated on th
Page 73 and 74: Agri-inputs / Automobiles India UDA
Page 75 and 76: Agri-inputs / Automobiles India BAS
Page 77 and 78: 12/5/2018 From India to US Election
Page 83 and 84: Thursday, 22 November 2018 Page 1 F
Page 85 and 86: Christopher Wood christopher.wood@c
Page 87: Christopher Wood christopher.wood@c
Page 95 and 96: 12/5/2018 Why You Would Not Have In
Page 97 and 98: Thursday, 29 November 2018 Page 1 F
Page 105: India Economics “Strong growth to
show all

WWRR Vol.2.015

Create successful ePaper yourself

Delete template?

Save as template?