Important Links

USD Awaits May Jobs Report

30 May 2017Economics
Picture

USD & JPY

Strategy: Mixed data may not deter Fed from June rate hike

US' first quarter GDP growth estimate was revised up from 0.7% to 1.2% but April's core durable goods orders, which excludes aircraft orders, fell more than expected. This may cast some doubt whether US growth is indeed broadening away from consumption.

Citi analysts expect the Fed to hike the rate by 25 basis points in June and then in September. They also expect the Fed to announce in December that they will start shrinking the balance sheet from January 2018.

EURO BLOC

Strategy: Sterling appears oversold, Euro range bound.

The EUR/USD fell overnight to a low of 1.1134 after European Central Bank President Draghi reiterated the need to continue extraordinary monetary support for now. Concerns that the Italian election may be brought forward to as early as September also weighed on the single currency. Citi analysts still see the Italian election taking place in February 2018. For now, the EUR/USD is likely to be capped on the upside between 1.1300 – 15 but supported around 1.0920.

COMMODITY BLOC

Strategy: CAD to outperform other commodity currencies.

CAD: The strong sell-off in oil prices despite the agreement by the 24 producer countries to extend output cuts through the first quarter of 2018 looks misplaced. Citi analysts continue to see upside for oil prices, expecting Brent to trade above US$60/bbl before June. In Citi analysts view, the CAD looks increasingly attractive against the other commodity currencies, particularly the AUD.

AUD: The gap between US and Australian bond yields is approaching multi-year lows. This together with falling iron ore prices is likely to weigh on the AUD. Australian April retail sales reading which will be released this Thursday is the key domestic event to watch this week.

GBP/USD has been unable to break through the 1.3050 resistance after recent polls on the UK election showed that the lead by the Conservatives has narrowed by 10 points. Citi analysts believe that the sharp decline in GBP/USD last Friday potentially provides a buying opportunity against the USD, EUR and AUD.

ASIA EMERGING MARKETS

CNY: Bloomberg reported that the People's Bank of China plans to change the CNY's fixing formula, which will rely less on the closing price. Citi analysts expect more volatility around the fix with this formula and for the CNY to strengthen against the basket.

SGD: The 1.3800 level is likely to prove to be a solid floor on USD/SGD given SGD it is already trading some 40 – 50 pips stronger than the mid band. Citi analysts see the Monetary Authority of Singapore retaining its accommodative stance for the rest of 2017 with the current flat slope viewed as "optimal"

Our recent research

Global Market Sell-off: Is This An Opportunity?

Citi believes last week's stock sell-off is following the course of many routine corrections that have been followed by recoveries, which could be an attractive opportunity for investors as valuations recover.

Find out more

Economics

Estimating the Impact of US Auto Tariffs

Citi's baseline is that the US could announce tariffs on auto imports, and not on auto parts but with temporary exemptions for trade partners with which trade talks are ongoing.

Find out more

USA
Brent Crude Price reaches a 4-year high - Market Insights by Citibank UK

Impact of Higher Oil Prices on Asia

While Citi's Brent crude price forecast remains at $79 per barrel for Q4 2018, recent price trends warrant an assessment of what the risk of sustained higher oil prices mean for Asia.

Find out more

Emerging Markets

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.