Please note and carefully read the

Important Disclosure on the last part

Daily FX & Market Commentary

January 10, 2017
Published from Tuesday to Friday
Market Recap Table: Daily Market Movement (Jan 9, 2017)
Equity Market Indices Close Change % Commodity Futures
Crude oil slid: WTI crude oil fell 3.8% U.S. Energy & Metals Close %
to US$51.96 a barrel as signs that S&P 500 Index 2,268.90 -8.1 -0.4% WTI Crude Oil (USD/bbl) 51.96 -3.8%
Dow Jones Industrial Average 19,887.38 -76.4 -0.4% Brent Crude (USD/bbl) 54.94 -3.8%
growing U.S. production and record Iraqi
NASDAQ Composite Index 5,531.82 +10.8 +0.2% Natural Gas (USD/MMBtu) 3.10 -5.5%
exports raised concerns that additional Europe COMEX Gold (USD/oz) 1,184.9 +1.0%
Stoxx Europe 600 Index 363.67 -1.8 -0.5% CMX Copper (USD/lb) 253.9 -0.3%
output would weigh on the market.
DAX Index 11,563.99 -35.0 -0.3% Bond Yields & CNY
Japan U.S. Treasuries - Yields Close Change
TOPIX Index 1,553.32 0.0 0.0% 3-Month - Yield (%) 0.50 -0.02
Treasuries rose with gold: Treasury Nikkei 225 Stock Average 19,454.33 0.0 0.0% 5-Year - Yield (%) 1.87 -0.05
China / Hong Kong 10-Year - Yield (%) 2.36 -0.05
prices rose, pushing yields lower, as an
Hang Seng Index 22,558.69 +55.7 +0.2% 30-Year - Yield (%) 2.96 -0.05
advance in riskier assets faltered amid Hang Seng China Enterprises 9,602.32 -8.7 -0.1% USD/CNY Close %
Shanghai SE Composite 3,171.24 +16.9 +0.5% China Renminbi Spot 6.94 +0.2%
uncertainty over the UKs future trading
Data Source: Bloomberg L.P.
role with Europe.

Hot News: US Earnings Season kicks off this week

Chart: S&P 500: Bottom-Up Quarterly EPS Growth
Estimate Outlook for 2016 Q4 earnings :
Preannouncements already suggest that
management teams have lowered expectations
significantly.
Overall earnings revisions have come down
sharply thus far in Jan, indicating that the
combination of a recently stronger dollar and weak
retailing results may have cut near-term forecasts.
The overall pick-up in estimated 4Q16 S&P 500
EPS has dipped from roughly 6% to just under 4%
over the past three-to-four months.
Source: Bloomberg L.P. and Citi, as of Jan 9, 2017

Sector earnings
Notably, Financials and Utilities are expected to
US kicks off earnings season this week: help pave the way for earnings.
Fourth quarter reporting season begins this week. Energy is likely to rebound year over year as well.
Results plus guidance may be instrumental given While IT sector prospects have improved in the
the equity market rally since early November. past few months, the opposite can be seen in the
The coming few weeks could be crucial for share Health Care sectors outlook.
prices as fund managers focus in on the numbers.

2017 Citibank
Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited 1
 Please note and carefully read the
Important Disclosure on the last part

Daily FX & Market Commentary

FX & Commodity Technical Corner
Citi Foreign Exchange
YESTERDAY PERFORMANCE FX TREND TECHNICAL
Forecast:
CCY
Short Term 0-3 6-12
Close Price Day High Day Low Support Resistance
Comment Months Months
USD 101.93 102.52 101.80 Neutral 100.51 103.82 101.90 108.45
EUR/USD 1.0574 1.0583 1.0511 Neutral 1.0073 1.0756 1.05 0.98
USD/JPY 116.03 117.53 115.96 Neutral 114.74 118.66 111.00 115.00
GBP/USD 1.2163 1.2278 1.2125 Bearish 1.1841 1.2591 1.24 1.14
USD/CAD 1.3216 1.3277 1.3197 Neutral 1.3082 1.3599 1.37 1.43
AUD/USD 0.7354 0.7374 0.7289 Neutral 0.7145 0.7409 0.72 0.69
NZD/USD 0.7016 0.7033 0.6949 Neutral 0.6867 0.7081 0.67 0.65
USD/CHF 1.0153 1.0198 1.0142 Neutral 1.0000 1.0344 1.00 1.05
USD/CNY 6.9375 6.9383 6.9300 Neutral -- -- 6.95 7.15
USD/CNH 6.8797 6.8897 6.8371 Bullish 6.7812 6.9895 -- --
USD/SGD 1.4363 1.4438 1.4340 Neutral 1.3964 1.4500 1.43 1.46
GOLD 1181.06 1186.30 1172.06 Neutral $1,124 $1,190 1180 1160
FX Rate Source: Bloomberg L.P. (cut off time is NY Time 5:00pm)

USD pared loss: Lockhart who is considered a dove said that he could see three hikes in 2017.
JPY jumped: Global equities fell and market risk elevated yesterday, which supported the safe-haven currency.
RMB weakened: CNH Overnight HIBOR rate plunged from 60% to 15.25% yesterday.
GBP fell: PM May said that after leaving the EU we will be able to have control of our borders.

Daily FX Focus

GBP/USD may fall toward 1.1841:

GBP Outlook:
Hard Brexit risk: We expect a transition period
with continued Single Market access but only
limited immigration restrictions. However, PM
1.2591(fibo 0.764) May may take the UK out of the Single Market
eventually.

1.1841(Oct 7 2016) Inflation risk: The economys resilience may

be tested by inflation rising above wage growth,
with limited space for consumers to reduce
savings or increase borrowing much further.
We currently expect UK GDP to grow by 1.4%
Source: Bloomberg L.P., data as of Jan 10, 2017 in 2017, following 2.0% in 2016.

Technical Analysis:
With RSI trending down, GBP/USD may fall toward 1.1841, with resistance at 1.2591.

NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
2017 Citibank
Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited
2
 Please note and carefully read the
Important Disclosure on the last part

Daily FX & Market Commentary

USD/CNH may rise gradually toward 6.9895:
6.9895 (2 Jan top) CNH Outlook:
Sharp fall in CNY overnight rate: HK
interbank CNY overnight rate fell from last Fris
6.7812-6.8602 (fibo 0.618 & 0.764) 60% to 15.25%, easing borrowing cost of short
CNH.

Expect further fund outflow: China FX

reserves decline to US$3,010bln in Dec, the 6th
consecutive monthly decline. We estimate net
capital outflow may remain large at around
Source: Bloomberg L.P., data as of Jan 10, 2017 US$160bn in Q1.

Technical Analysis:
As the RSI is turning up from the oversold region and the pair rebounded after holding above trendline support,
the pair may edge higher toward 6.9895, with short-term support at 6.8602. Next support may be seen at 6.7812.

Source: Bloomberg L.P.

Important Economic Data (January 9, 2017 January 13, 2017) (K = Thousand, M = Million, B = Billion)

Time Importance Event Period Actual Survey Prior

Monday
01/09/17 08:30 AU ! Building Approvals YoY Nov -4.80% -5.70% -24.00%
01/09/17 18:00 EC ! Unemployment Rate Nov 9.80% 9.80% 9.80%
01/09/17 23:30 CA ! BoC Senior Loan Officer Survey 4Q -2.6 -- 3.3
Tuesday
01/10/17 08:30 AU !! Retail Sales MoM Nov -- 0.40% 0.50%
01/10/17 09:30 CH !! CPI YoY Dec -- 2.20% 2.30%
01/10/17 21:30 CA ! Building Permits MoM Nov -- -- 8.70%
Wednesday
01/11/17 17:30 UK !! Trade Balance Nov -- -3755 -1971
01/11/17 17:30 UK !! Industrial Production YoY Nov -- 0.30% -1.10%
01/11/17 17:30 UK !! Manufacturing Production YoY Nov -- 0.40% -0.40%
Thursday
01/12/17 07:50 JN !! Trade Balance BoP Basis Nov -- 246.8b 587.6b
01/12/17 21:30 US !! Initial Jobless Claims Jan -- -- 235k
Friday
01/13/17 21:30 US !!! Retail Sales Advance MoM Dec -- 0.50% 0.10%
01/13/17 21:30 US !!! Retail Sales Ex Auto MoM Dec -- 0.50% 0.20%
01/13/17 22:00 CA !! Existing Home Sales MoM Dec -- -- -5.30%
01/13/17 23:00 US !! U. of Mich. Sentiment Jan -- 98.6 98.2
01/13/17 CH !! Trade Balance Dec -- $47.60b $44.61b
01/13/17 CH !! Exports YoY Dec -- -4.00% 0.10%
01/13/17 CH !! Imports YoY Dec -- 3.00% 6.70%
NOTE: The brackets are the exchange rates in terms of Hong Kong dollar, with HKD $7.75 exchange rate for reference, and 1,000 yen per unit for JPY/HKD.
2017 Citibank
Citibank and Arc Design is a registered service mark of Citibank, N.A. or Citigroup Inc. Citibank (Hong Kong) Limited
3
 Please note and carefully read the
Important Disclosure on the last part

Daily FX & Market Commentary

Important Disclosure
Citi analysts refers to investment professionals within Citi Research (CR) and Citi Global Markets (CGM) and
voting members of the Global Investment Committee of Global Wealth Management.
Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or
preparation of this document. Investment products are not available to US persons and not all products and
services are provided by all affiliates or are available at all locations.
This document is for general informational purposes only and is not intended as a recommendation or an offer or
solicitation for the purchase or sale of any security, currency, investment, service or to attract any funds or deposits.
Information in this document has been prepared without taking account of the objectives, financial situation or
needs of any particular investor. Therefore, investment products mentioned in this document may not be suitable
for all investors. Any person considering an investment should seek independent advice on the suitability or
otherwise of a particular investment. Before making any investment, each investor must obtain the investment
offering materials, which include a description of the risks, fees and expenses and the performance history, if any,
which may be considered in connection with making an investment decision. Each investor should carefully
consider the risks associated with the investment and make a determination based upon the investors own
particular circumstances, that the investment is consistent with the investors investment objectives.

In any event, past performance is no guarantee of future results, and future results may not meet our expectations
due to a variety of economic, market and other factors. Further, any projections of potential risk or return are
illustrative and should not be taken as limitations of the maximum possible loss or gain. Investments are not
deposits or other obligations of, guaranteed or insured by Citibank N.A., Citigroup Inc., or any of their affiliates or
subsidiaries, or by any local government or insurance agency, and are subject to investment risk, including the
possible loss of the principal amount invested. Investors investing in funds denominated in non-local currency
should be aware of the risk of exchange rate fluctuations that may cause a loss of principal.
Neither Citigroup nor its affiliates can accept responsibility for the tax treatment of any investment product, whether
or not the investment is purchased by a trust or company administered by an affiliate of Citigroup. Citigroup
assumes that, before making any commitment to invest, the investor and (where applicable, its beneficial owners)
have taken whatever tax, legal or other advice the investor/beneficial owners consider necessary and have
arranged to account for any tax lawfully due on the income or gains arising from any investment product provided
by Citigroup. If an investor changes country of residence, citizenship, nationality, or place of work, it is his/her
responsibility to understand how his/her investment transactions are affected by such change and comply with all
applicable laws and regulations as and when such becomes applicable.
Although information in this document has been obtained from sources believed to be reliable, Citigroup and its
affiliates do not guarantee its accuracy or completeness and accept no liability for any direct or consequential
losses arising from its use. Opinions expressed herein may differ from the opinions expressed by other businesses
or affiliates of Citigroup, 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. The information contained
herein is also not intended to be an exhaustive discussion of the strategies or concepts.
At any time, Citigroup companies may compensate affiliates and their representatives for providing products and
services to clients.

This is not an official statement of Citigroup Inc. and may not reflect all of your investments with or made through
Citibank. For an accurate record of your accounts and transactions, please consult your official statement.

If this document shows information coming from Citi Research, please refer to the attached link:
https://www.citivelocity.com/cvr/eppublic/citi_research_disclosures , which contains the important disclosures
regarding companies covered by Citi's Equity Research analysts, and please refer to the attached link:
https://ir.citi.com/PuXs6xELNHAu7UqkjgvWxnihtUeLtAtDxeEh%2B2qaPpPb7uukpx8Qw1vzcuidtMtqgn1BWqJqak
8%3D for details on the Citi Research ratings system.
This document may not be reproduced or circulated without Citigroup written authority. The manner of circulation
and distribution may be restricted by law or regulation in certain countries. Persons who come into possession of
this document are required to inform themselves of, and to observe such restrictions. Any unauthorised use,
duplication, or disclosure of this document is prohibited by law and may result in prosecution.
This document is distributed in Hong Kong by Citibank (Hong Kong) Limited (CHKL). Prices and availability of
financial instruments can be subject to change without notice. Certain high-volatility investments can be subject to
sudden and large falls in value that could equal the amount invested. 5
 Please note and carefully read the
Important Disclosure on the last part

Daily FX & Market Commentary

Important Disclosure
Risk relating to RMB If you choose RMB as the base currency or the alternate currency, you should also note the
following:
RMB is currently not freely convertible through banks in Hong Kong. Due to exchange controls and/or restrictions
imposed on the convertibility, utilisation or transferability of RMB (if any) which in turn is affected by, amongst other
things, the PRC government's control, there is no guarantee that disruption in the transferability, convertibility or
liquidity of RMB will not occur. There is thus a likelihood that you may not be able to convert RMB received into
other freely convertible currencies.
CNH exchange rates and CNY exchange rates are currently quoted in different markets with different exchange
rates, whereby their exchange rate movements may not be in the same direction or magnitude. Therefore, the
CNH exchange rate may be different from the CNY exchange rate.