GIC Monthly Market Review - CTBC Private Bank Market Revi… · Jan Feb Mar Apr May Jun Elections...

1February 2017

GIC Monthly Market ReviewInvestment Strategy and Outlook

February - 2017

2February 2017

2016 2017F 2018F

Global 3.0 3.4 3.8

US 1.5 2.5 (2.3) 3.5 (2.8)

Europe 1.5 1.3 (1.1) 1.4

Japan 0.6 1.2 1.2

China 6.7 6.4 6.0

2016 2017F 2018F

Global 3.2 3.4 -

US 1.6 1.9 2.2

Europe 1.0 1.3 1.5

Japan 0.0 0.6 1.1

China 1.8 2.5 2.4

# of times

Q1 Q2 Q3 Q4

Fed 3Fed median forecast appropriate rate of 1.375% at the end of 2017

CTBC 2 0.75 0.75 1.00 1.25

• Much rests of the enactment and success or not of Trump’s proposed policies• GDP momentum and earnings positive, but much of the good stuff priced in –

lots of bad stuff being ignored – risks are to the downside, opportunities forEuropean bond tantrums, low duration, high volatility

• Earnings: Japan still cheap to the U.S. – Valuations are full and will comeunder pressure

• Divergence will in full force this year produces winners and losers• Sentiment and positioning are divergent therefore risks are high for a sell-off

• Themes:‒ Event risks in the year ahead are significant

‒ Small Caps are a selective reflation winner. U.S. > Europe, High uncertaintyis a drag, Japan neutral to positive, Open EMs (Asia) could face further

headwinds if Trump closes trade windows, raises tariffs and immigrationcut, advise caution on a Trump Rally

‒ Corporate Tax cuts ignite opportunities‒ Sector deregulation in the U.S. beneficial to interest groups such as

financials‒ Do not ignore ESG (environment, social and governance) in EM

‒ Rotation opportunities as reflation either appears or stutters‒ Equity Duration – in the face of falling yields

‒ Policy proposals we need to track are:1. Lower Corp Tax Rates

2. Overseas Cash Repatriation3. Regulatory Rollback

4. Government Infrastructure Spending

Macro Roadmap – 2017: Global GDP Growth 3.4 GDP Forecast

Inflation Forecast

2017 Fed Rate Hikes

Key Forecasts for 2017

3February 2017

Key Forecasts for 2017: Country Growth & Inflation

U.S. IPB IMF CON.

Growth 2.5(2.3)

2.3(2.2)

2.3

Inflation 1.9 2.3 2.4

Source: CTBC, IMF, Bloomberg, 1 February 2017

Eurozone IPB IMF CON.

Growth 1.3(1.1)

1.6(1.5)

1.5

Inflation 1.3 1.1 1.4China IPB IMF CON.

Growth6.4

6.5(6.2)

6.5


Japan IPB IMF CON.

Growth1.2

0.8(0.6)

1.1


Australia IPB IMF CON.

Growth 2.3 2.7 2.5


Global IPB IMF CON.

Growth 3.4 3.4 3.2


U.K. IPB IMF CON.

Growth1.2

1.5(1.1)

1.2


4February 2017

Jan Feb Mar Apr May Jun

Elections

15 Netherlands

Parliamentary Elections

26 HK

Chief Executive Election

23 April - 7 May France

Presidential Election

(2 Rounds)

4 U.K.

Regional Elections

11 France

Legislative Elections

Central

Bank

Policy

Meetings

19 ECB

30 - 31 BoJ

2 Fed

2 BoE

9 ECB

15 - 16 BoJ

16 Fed

16 BoE

26 - 27 BoJ

27 ECB

4 Fed

11 BoE

8 ECB

15 Fed

15 BoE

15 - 16 BoJ

Important

Events

20 U.S.

Presidential Inauguration

17 - 20 Switzerland

World Economic Forum

Annual Meeting

31 U.K. & EU

Invocation of Article 50

Lisbon Treaty (Brexit)

possible by this date

March China

12th National People Congress

Government Work & Fiscal

Budget Report

March / April

ASEAN Summit

3 China

1st International Belt & Road

Initiative Summit

26 - 27

G7 Summit

7 Korea

Deadline for Court Ruling on

President Impeachment

Jul Aug Sep Oct Nov Dec

Elections

25 India

President Elected by Electoral

College Deadline

26 Singapore


(Date not confirmed)

11 Norway

Parliament Elections

Spain

Tentative Timing of Catalonia

Independence Referendum

22 Germany

Parliamentary Elections

Deadline

19 Chile


20 South Korea


Central

Bank

Policy

Meetings

19 - 20 BoJ

20 ECB

27 Fed

3 BoE

7 ECB

14 BoE

20 - 21 BoJ

21 Fed

26 ECB

30 - 31 BoJ

2 Fed

2 BoE

14 ECB

14 Fed

14 BoE

20 - 21 BoJ

Important

Events

7 - 8 Germany

2017 G20 Hamburg Summit

August

ASEAN Summit

November China

19th Party Congress confirm

new members of Standing

Committee (likely)

7th Party Plenum (likely)

December China

Central Economic Work

Conference

2017: a year dominated by POLTICAL UNCERTAINTY

5February 2017

Key Forecasts for 2017

• Price path was expected to be choppy in 2016 due to tepid globalgrowth, divergent central bank policies, and downside movement inoil/commodity prices. Election has seen some turn in policy mix.

• Continued range trading is likely to be a profitable strategy in 2017,this is a year of high uncertainty; expect sporadic dislocations.

• We expect to see gains for S&P 500 more likely to come in 2017 assentiment and growth continue to improve.

• Brexit created headwinds for the struggling European banks.Volume of new issuance and trading activity will likely be subduedin the near term on heightened uncertainty.

• China government stimulus critical to arrest the slowing growth.Possible MSCI inclusion could be a catalyst could lead to fund flowsinto China.

Index Year End Price Tactical View

S&P 500 2,380 2,279 OW

Euro Stoxx 600 392 360.12 OW

Topix 1,860 1,522 UW

MSCI Asia ex Japan

513 546.16 N

Equity Outlook FX & Commodities Outlook

Pair Year End Price

EURUSD 0.95 – 1.00 1.08

USDJPY 125.00 112.80

USDCNY 7.20 6.88

USDSGD 1.49 1.43

USDCAD 1.38 1.31

USDCHF 1.08 1.00

AUDUSD 0.68 0.75

NZDUSD 0.65 0.72

GBPUSD 1.10 1.26

• Expect oil markets will continue to rebalance In 2017. Strategicenergy recommendations limited to 55 – 65 target. Going forward,we continue to favor energy exposure over base and preciousmetals, agriculture and softs. Still, we are tactically long copper,silver and sugar based on short-term catalysts. We will look for sell-offs in deferred oil markets to get long. Lastly, we continue to favorlong inflation-related plays.

• Trumponomics turns out to be a disappointment• Political Risks: European elections, Brexit negotiation, Asia

geopolitical risks• Policy uncertainty• Trade war that re-ignites stagflation possibility• China capital outflow / CNY depreciation

FX Rates Targets for Year End 2017:

Key Risks

Source: CTBC, Bloomberg, as of 31 January 2017

6February 2017

Long Term Themes Implications

• Debt Super Cycle• End of a Super Cycle often marked by an increase in debt, which

we may now see in the U.S. as Europe and EM are still at early stages of post debt deleveraging

• Technological Disruption• IT in mature phase, and it’s the first and last stages where

investors make profits

• EM Deleveraging • Need to see structural reforms

• Multi-Polar Geopolitics • End of American hegemony

• End of the Bond Bull Market • An on going call

• Subpar Long-Run Returns • Occurring both in equity and bonds

• Mal-Distribution on Income• Affects economic / social stability and consumer behavior/

Demographics - Millennials

• European Politics • Year of Elections and Binary Events

• Higher Volatility • FX as the major tool for the spread of Vol

GIC Mega-Themes 2017

7February 2017

Key Themes Implications

• A year of reflation • More US rate hikes => $ strength to continue but in a more moderate manner

• Linkers to outperform US Treasury• FRNs to outperform fixed rate bonds• Tactical Unwind of the Trump Reflation Trade

• Policy focus shifts from monetary to fiscal

• Fixed income: coupon clipping for yield focused investors; short duration for ability to reinvest at higher rates; yield curve strategies

• Corporate default rate to fall – HY or IG ok for now• Commodities to benefit• EM fundamental to improve but watch for sentiment

• Great rotation finally arrives… • Higher equity returns but expect divergence• Prefers value style• US: sector selective – Financials, H/care, Industrial, Real Estate + smid cap• Japan, India, Indonesia and Russia likely to outperform• China – focus is back on addressing leverage and asset bubbles. Possible

MSCI inclusion could be a catalyst

• …in a year of busy geopolitical event agenda

• Risk-on, risk-off, high volatility• Back to basics: Focus on fundamentals and long term trend• GBP – sell but buy OTM calls, or sell middle buy wings• Underweight French Debt

Investable Themes for 2017

8February 2017

Economic View Implication

The inauguration of President Trump sets the clock ticking for a different policyera. However, a lack of predictability and a unilateral approach to trade willincrease the risk premiums; all we can do is wait to see what Trump’s team “does”as opposed to “reacting” to what they may be tweeting at any moment in time.The initial euphoria that welcomed this promised change in policy mix played outfor the most part before the start of 2017. Since then, price moves have beennarrow although for choice incrementally higher as the indices in Americaapproach or breech historical highs. What is absolutely indisputable is that theglobal economy as reflected in the underlying macro economic data is in far bettershape this year. Policy changes impact individual stocks and sectors more thansimply the cost of capital. Reduced correlation between stocks favor activeinvestments.

Markets have mostly gone our way. Over the course of the last three GICmeetings we had increased our equity exposures while reducing our cash andbond holdings. This has paid off into the end of 2016 where the lion’s share ofreturns were made post the Trump election results. At the start of 2017 webelieved too much good news had already been priced in while not enoughrisk. As a result, we took profits at a high level asset allocation by reducing theoverweight equity leg and putting that money into IG bonds and cash. We arestill constructive on the market and would like to buy on dips from anoverweight cash position as some of the unknowns peel away. We have astrong anti inflation position in silver and gold and base metals. As always whenfaced with risks of higher levels of volatility, it is important to STAY BALANCED,and diversified.

U.S. The changed policy mix referred to above is going to impact the U.S. directly.However, in a highly over valued market it is difficult to tell if the turn down inmomentum witnessed since the start of the year augurs for a future sell off. Themacro economic data continues to be positive as falling unemployment andstronger housing drive confidence higher. There will be other beneficiaries to theAmerican lead recovery namely Europe.

The U.S. continues to be the bright spot on the global economic horizon. Goodpublic and corporate health will translate into earnings and higher equity prices.We expect diversification of performance across the asset classes and within theequity space we expect that performance will be driven by active managementand stock picking. The U.S. is still our preferred market and we maintain ourOVERWEIGHT.

Although Europe has improved in macroeconomic terms there are still adisturbingly high number of politically driven binary events that could lead togreater uncertainty and underperformance in 2017. This includes the Dutch,French and German elections. We have had some clarity around Article 50whereby the UK’s Supreme court has opined that only British Parliament caninvoke it and not the Government . We are positive on European value.

The ECB, remains an ultra dovish institution and the current loose policy fromthem is likely to continue for some time. Providing inflation stays in its box, thenall will proceed smoothly. We have revised upwards our growth forecasts forboth the U.S. and Europe, as have the IMF and other venerable internationalbodies. Within the block we are more positive on Germany whose economy issound. Increase to OVERWEIGHT.

China has shown further signs of economic stabilization as signs of reform drivensuccess become more evident. The move towards a more service oriented,domestically driven economy as opposed to export driven manufacturing one isshowing signs of success. China and Russia look set to benefit most from growingAmerican isolationism.

China has had a good year. It has managed significant reforms whilemaintaining growth at levels at or above their targets. A year on, we do nothear of any fears around ‘hard landings’. Controlling FX outflows is now centralto policy and we see changes in rates, rules and the basket to address this.Maintain NEUTRAL. (Taiwan remains overweight)

Japan’s economy has not been moving slowly into expansionary territory. Thegrowing strength in the Yen which followed directly from U.S. government officialstrying to talk the dollar down and a growing safety trade after Trump took officehas taken the Nikkei prisoner.

Dollar/Yen dependent. Of all the parts of the Japanese economy that are doingrelatively better, it is the exporters that are thriving. Domestic consumption isstill too low. The Yen is the current wild card and we could as easily see 108 as118, we reduce exposure to UNDERWEIGHT.

USD looks overbought, a short term respite is inevitable, divergence supportsmedium term and twin deficits are long term negative. Oil yr end 2017 $60

For commodities, we have an inflation related overweight long silver/goldposition some base metals. Oil stable to higher. Softs - positive

House View Summary – 25 January 2017 GIC

9February 2017

32%

15%

13% 11% 10%

8% 6%

5%

3% 1% 1% 1%

(11)%

13%

10%

8% 6% 6%

4% 4% 3%

1% 1%

4% 3% 2%

1% 1%

(1)% (2)%(4)%

(6)%(7)%

(17)%

26%

23%

19% 18% 17% 17%

11% 9% 9%

5%

(9)%

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%

30%

35%

Ru

ssia

MIC

EX

UK

FTS

E 1

00

Ge

rman

y D

AX

Taiw

an T

WSE

US

S&P

50

0

Au

stra

lia A

SX 2

00

Jap

an N

ikke

i 2

25

Fran

ce C

AC

40

Ind

ia N

ifty

50

Euro

Sto

xx 5

0

HK

Han

g Se

ng

SG S

TI

Ch

ina

Shan

ghai

Asi

an H

Y

EU H

Y

US

HY

EU IG

Spai

n 1

0Y

Ge

rman

y 1

0Y

Asi

an I

G

US

IG

Ital

y 1

0Y

UST

10

Y

Do

llar

Ind

ex

CA

D

JPY

NZD

TWD

AU

D

SGD

EUR

CN

H

CN

Y

GB

P

Pal

lad

ium

Bre

nt

Cru

de

WTI

Cru

de

Silv

er

Nat

ura

l Gas

LME

Co

pp

er

Nic

kel

Go

ld

LME

Alu

min

um

Pla

tin

um

Co

rn

2016 2017 Jan

Key Assets Performance: 2017 January

From the below chart, we can see that returns have been back loaded to the end of 2016 and thatthe current year has not been a large contributor despite the headlines of new all time highs inequity indices.We understand the euphoria around the introduction of significant change agents is boosting

confidence in the short term, but we also bear a certain degree of scepticism when looking forwardto some potentially difficult political practicalities ranging from elections to budgets.

Source: Bloomberg

10February 2017

Global Macro: Outlook for Growth

Global GDP

Source: Bloomberg, 1 February 2017

•Economic outlook as welook to 2017 is rosier thanwe have seen in many years,but beware the fat tails ofpolitics.

•Economies are on a firmerfooting, despite growingfears around protectionism.

•China is managing its owneconomic rebalancing wellenough.

Baltic Dry Index

China Trade

11February 2017

Global Macro: Outlook for Inflation

Inflation in Key Countries – rising slowly, mostly at the headline level


12February 2017

Global Macro: Outlook for the Economy

Surprise Index


•Economic data streams are on trackfor a relatively robust start.

• It is not a tear-a-way situation butgenerally, PMIs and ISM are risingabove 50 and many are at highs notseen since the GFC.

Systemic Stress in Eurozone Financial System

Indicator calculated using market-based financialstress measures. Values fall within 0 and 1, closerthe values to 1, the higher stress levels.

Stress at relatively lows

13February 2017

Global Macro: Manufacturing Sector

Manufacturing PMI – steadily reflecting signs of growth


14February 2017

Global Macro: Services Sector

Services PMI – within expansion territory


15February 2017

Global Macro: Liquidity and Financial Conditions

•Focus of the central banks is “coreinflation” and that appears to besteady, under control and currently nota threat.

•Trump’s victory and aggressivevapproach to business hasfundamentally reordered theeconomic, financial and securityarrangements existing since WWII. Thisis hugely significant.

•Whether Trump can “pull it off” vis-a-vis the balancing constraints of the U.S.government’s policies and proceduresremains to be seen. With the sackingof his Attorney General he seems off toa brisk start.

Source: Fed, ECB, PBoC, BCA, Bloomberg, 1 February 2017

Credit Impulse – More momentum in China, while others lag

China Monetary Conditions

Euro Area

U.S.

China

Lower/higher reading reflect tighter/looser monetaryconditions compared with previous period.

RemainRelativelyLoose

16February 2017

Global Macro: We expect more unexpected tides in 2017

Market Volatility

•Everyday, headlines around Trump’slatest gyration leave the marketsguessing; so in the meantime, thecall to maintain reduced risk levels isstill strong.

•We see the decline in pricemomentum as a clear warning fromthe technical charts and we wouldadvise caution.

•U.S. equity volatility is at a four yearlow and looks attractive in terms ofpaying for protection as a hedge.


17February 2017

Asset Allocation: Asset Class Level

• Starting January 1st 2017, we had adjusted ourrisk taking downward, taking profits on equitiesand reinvesting in now much cheaper IG bondsand raising cash.

•We did not significantly change our high levelasset allocations at the most recent GIC meeting.

•We are long of cash, positioned to invest on anydips as the passing of known unknowns of 2017unveil investment opportunities.

50%

50%

53%

37%

6%

4%

52%

31%

9%

8%

- 3%

+ 3%

-20% -10% 0% 10% 20% 30% 40% 50% 60%

Equity

Fixed Income

Alternatives

Cash

BM SAA TAA TAA Change

18February 2017

Asset Allocation: Country Level

• In this meeting, basic economics remain intact, but several leading indicators warn ofheadwinds. Trouble is most evident in thestrange behavior of the USDJPY.

• Being sensitive to the risk return trade-offwe have again decreased our exposure toJapan, and rotated into Europe.

6.2%

4.4%

3.7%

2.7%

2.2%

1.6%

3.7%

32.1%

13.2%

20.8%

7.0%

3.0%

2.8%

8.0%

9.4%

7.9%

5.3%

0.0%

7.1%

1.1%

3.6%

42.3%

7.7%

25.0%

6.4%

3.5%

13.8%

1.4%

+ 0.4%

+ 0.3%

+ 0.4%

+ 0.1%

+ 0.2%

+ 2.3%

- 8.7%

+ 5.0%

+ 1.3%

+ 0.7%

+ 2.8%

+ 0.3%

-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Australia

China

Korea

Taiwan

HK

India

ASEAN

U.S.

Japan

Europe

UK

France

Germany

Europe Others

EM ex Asia

SAA TAA 25 Jan TAA Diff vs. previous adjustment

19February 2017

Asset Allocation: C1 through C5

TAA*: Difference from last TAA; SAA*: Difference from current TAA to current SAA.TAA – Reflects the GIC views on financial markets and aims to capture short-term market inefficiencies. We review the TAA in ourmonthly Global Investment Committee Meeting.

U.S. 8 + 1 15 + 3 22 + 5 29 + 7 31 + 6

Europe 5 + 1 + 1 8 + 1 + 1 13 + 2 + 2 16 + 1 + 1 21 + 3 + 3

Japan 1 - 2 - 1 3 - 3 - 2 4 - 5 - 3 5 - 7 - 3 6 - 6 - 3

Asia ex Japan 3 7 13 18 24

EM ex Asia 0 0 - 3 0 - 5 0 - 6 0 - 8

Total 17 - 1 + 1 33 - 2 - 1 52 - 3 - 1 68 - 6 - 1 82 - 3 - 2

Global IG Bonds 24 - 25 19 - 20 14 - 13 8 - 10 2 - 5

Global HY Bonds 28 + 1 + 22 20 + 2 + 15 10 + 3 + 7 9 + 6 + 7 4 + 3 + 4

EM Bonds 11 8 7 5 1

Total 63 + 1 - 3 47 + 2 - 5 31 + 3 - 6 22 + 6 - 3 7 + 3 - 1

Global REITs 0 - 1 2 - 1 2 - 1 3 - 1 3 - 2

Commodities 5 + 3 6 + 4 7 + 4 6 + 4 7 + 4

Total 5 + 2 8 + 3 9 + 3 9 + 3 10 + 2

Cash Cash Equivalents 15 12 + 3 8 + 4 1 + 1 1 + 1

100 100 100 100 100

11 - 14 14 - 16 16 +

Fixed Income

Alternatives

Total

Proposed SD Band (%) 6 - 9 9 - 11

Equity

TAA * SAA *TAA

25 JanTAA *

TAA Results (%)

C1 C2 C3 C4

TAA * SAA *

C5

TAA

25 JanTAA * SAA *

TAA

25 JanSAA *

TAA

25 Jan

TAA

25 JanTAA * SAA *

20February 2017

Fed Dot Plot Path Fed dot plot path shows the Fed will raise rates three times each year from 2017 to 2019. We believe they will

hike only twice. Fed does not take into consideration the potential impact of Trump’s stimulus package.Yellen said that risks to financial stability in the US were “moderate,” and the Fed is watching for new policies

from the Trump administration and how they might change the Fed outlook. Timing of the next rate hike willdepend on how the economy actually evolves over coming months.

GIC - Fixed Income: Rates Outlook

21February 2017

UST Yield Curve ReviewChart shows how the UST yield curve has shifted YTD from November 8, 2016. It’s always good to get a bearing of how the curve has shifted with changing policies.Belly of the curve is the most defensive place to be in when the yield curve starts to bear-steepen before

flattening over the medium term.


22February 2017

UST 10yr Yield RetracementRetracement to 2.64% from the historical low of 1.32% (in Jul 2016) has proven to be a strong resistance.10yr yield has built in all the reflationary story and the latest Fed’s dot plot path.Previous peaks at 2.29%-2.34% congestion area saw die-hard bears initiating new short positions in the UST.However, we could see the 10yr yield technically testing the retracement level at 2.13%.This could be the first level to lighten some positions in the 1Q2017.


23February 2017

UST Volatility OutlookChart shows the UST10yr yield vs. the Bank of America Merrill Lynch MOVE Index (UST Volatility).Only constant and certainty about the Trump administration is increasing volatility.Market is watching closely for details on Trump’s campaign-trail promises to boost growth and spending.These details, whether forth-coming or otherwise, are likely to drive market’s directions.


24February 2017

Credit Spreads vs. Benchmark YieldsChart shows the UST10yr yield vs. the 5yr Asian IG CDS.5yr Asian IG CDS has at first widened in tandem with rising UST yields initially just after the election.While the 5yr UST has climbed 70bp, the 5yr Asian IG CDS has actually compressed about 20bp to pre-election

level.Asian credits enjoy strong local bids, lower correlation to global risk assets and have outperformed UST.As a result, the tightening spreads have helped mitigate the effects of the rising UST yields.

GIC - Fixed Income: Asian Credits

25February 2017

• Our OW calls on Financials and Energy did not work well thismonth.

• We are maintaining our OW stance on financials as we expectthem to benefit from easing regulations and rising interest ratesover the medium term. Both JP Morgan and Bank of Americaalso guided an acceleration in 1Q17 earnings.

• No change in sector strategy.

GIC - Equity: US Sector Review

26February 2017

• Energy: While the OPEC members have abided to theproduction cuts; an increase in drilling activities in the U.S., aswell as Trump’s plans to achieve energy independence andaccessing “vast untapped domestic energy reserves in the U.S.”are keeping a lid on oil prices.

• Expect oil markets will continue to rebalance in 2017. Strategicenergy recommendations limited to 55 – 65 target . MaintainOW.

• Healthcare: Hit by worries over drug pricing pressure in the U.S.Still an attractive defensive sector to own during volatile times.

GIC - Equity: Europe Sector Review

27February 2017

GIC - Equity: Asia Sector Review

28February 2017

Equity: Main Indices, Valuations and Targets

Source: CTBC, Bloomberg, as of 31 January 2017Technical Analysis Summary

1 Year Performance

29February 2017

Foreign Exchange – no change in forecasts for year end

EURUSD & USDJPY (Invert)


USDCNY & USDCNH (both Invert)

Dollar Index • USD – Fed path to further raising rates remains intact. PresidentTrump likely to add volatility and we have already seen knock tothe dollar off its recent ascent. We continue to preach selectinglevels to establish and lighten strategic positions given that we donot see large direction moves on FX this year.

• EURUSD – remain tangled with political uncertainty as marketawaits key national elections in Netherlands, France andGermany. One of the key risks is rise of anti-EU sentiment.Contagion could spread which would put our second scenario ofEURUSD breaking below parity become reality.

- Year End Target: EURUSD 0.95 – 1.00 / GBPUSD 1.10

• USDJPY – expected higher US yields and Trump reflationmomentum will continue to support USDJPY. However, given thatFed remains data watching and speculative positions leaningtowards high on long USD, we may continue to see someretracements before next Fed hike.

- Year End Target: 125

• USDCNY – pressure continue to come from Fed path of raisingrates and even introducing an expanded basket to calculate valueof RMB by adding more currencies and reducing weights of USDis unlikely to reverse trend of a slightly higher dollar.

- Year End Target: USDCNY 7.20

30February 2017

Commodities: Constructive on Commodities

Demand-side risk to increase price volatility


Oil price relatively stable

Gold Price

• Silver and Gold had enough of a setback late last year to be attractive.

•Overall outlook for commodities issupportive on the back of a strongerglobal growth picture. Going forward,the contribution of demand-side riskto price volatility will increase. This willalso be evident in iron ore, steel andbase metals.

•OPEC and other meaningful playerssuch as Russia’s support of the oilmarket through supply restriction hashelped lift the price of the commodityand add stability to the complex. Thecurrent agreements are holding andthese run until June.

31February 2017

GENERAL DISCLAIMERS:

1. This document and the investments and/or products referred to herein are for information only and do not have regard to your specific investment objectives, financial situation or particular

needs.

2. This document and the investments and/or products referred to herein should not be construed as any recommendation for you to enter into the investment briefly described above and this

document must be read with CTBC’s General Terms and Conditions including without limitation Risks Disclosure Statements, Supplemental Terms and Conditions and such terms and

conditions specified by CTBC from time to time.

3. You are advised to exercise caution in relation to this document. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice from a

licensed or exempt financial adviser before making your commitment to invest in the investments and/or products referred to herein.

4. If you choose not to seek advice from a licensed or exempt financial adviser or such other independent professional, you should carefully consider whether investment in the investments

and/or products referred to herein is suitable and appropriate for you taking into consideration the risks and associated risks.

5. The final terms and conditions of the proposed investment in the investments and/or products referred to herein will have to be set out in full in the definitive trade confirmation between CTBC

and you.

6. CTBC does not guarantee the accuracy or completeness of any information contained herein or otherwise provided by CTBC at any time. All of the information here may change at any time

without notice.

7. CTBC is not responsible for any loss or damage suffered arising from this document.

8. CTBC may act as principal or agent in similar transactions or in transactions with respect to the instruments underlying the transaction.

9. Until such time you appoint CTBC, CTBC is not acting in the capacity of your financial adviser or fiduciary.

10. Investments involve risks. Past performance figures, predictions or projections are not necessarily indicative of future or likely performance. Actual performance may differ from the

projections in this document.

11. Any references to a company, financial product etc is used for illustrative purpose and does not represent our recommendation in any way.

12. Any scenario analysis is provided for illustrative purpose only and is no indication as to future performance and it does not reflect a complete analysis of all possible scenarios that may arise

under an actual transaction. All opinions and estimates given in the scenarios are illustrative and do not represent actual transactions.

13. The information in this document must not be reproduced or shared without our written agreement.

14. This document does not identify all the risks or material considerations that may be associated with you entering into of the transaction and the transaction period you wish to consider.

15. This document does not and is not intended to predict actual results and no assurances whatsoever are given with respect thereto. It does not present all possible outcomes or takes into

consideration all factors that may affect or influence the transaction.

16. This document is based on CTBC’s understanding that you have inter alia sufficient knowledge, experience and access to professional advice to make your own evaluation and choices of the

merits and risks of such investments and you are not relying on the CTBC nor any of our representatives or affiliates for information, advice or recommendations of any sort whatsoever.

17. You should have determined without relying on CTBC or any of our representatives or affiliates for information, advice or recommendations of any sort whatsoever, the economic risks and

merits as well as the legal tax and accounting aspects and consequences of the transaction and that you are able to fully assume such risks.

18. CTBC accepts no responsibility or liability whatsoever for any loss of whatsoever nature suffered by you arising from the use of this document or reliance on the information contained herein.

19. CTBC may have alliances with product providers for which CTBC may receive a fee and product providers may also receive fees from your investments.

20. The following exemptions under the Financial Advisers Regulations apply to the CTBC and its representatives:

(1) Regulation 33(1) – Exemption from complying with section 25 of the Financial Advisers Act (“FAA”) when making a recommendation in respect of (a) any designated investment

product (within the meaning of section 25(6) of the FAA) to an accredited investor; (b) any designated investment product (within the meaning of section 25(6) of the FAA) that is a

capital market product, to an expert investor;

(2) Regulation 34(1) – Exemption from complying with section 27 of the FAA when making a recommendation in respect of (a) any investment product to an accredited investor; (b) any

capital markets product to an expert investor or (c) any Government securities;

(3) Regulations 36(1) and (2) – Exemption from complying with sections 25, 26, 27, 28, 29, 32, 34 and 36 of the FAA when providing any financial advisory service to any person

outside of Singapore who is (a) an individual and (i) not a citizen of Singapore; (ii) not a permanent resident of Singapore; and (iii) not wholly or partly dependant on a citizen or

permanent resident of Singapore; or (b) in any other case , a person with no commercial or physical presence in Singapore.

GIC Monthly Market Review - CTBC Private Bank Market Revi… · Jan Feb Mar Apr May Jun Elections...

Documents

Transcript of GIC Monthly Market Review - CTBC Private Bank Market Revi… · Jan Feb Mar Apr May Jun Elections...