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Daily Briefing – Monday, August 14, 2017


A severe miss of inflation expectations – the 7th in a row – sent the dollar index down on Friday by 60 cents. On Thursday, initial jobless claims rose more than expected to 244K and producer inflation missed expectations as well (1.9% for July). The next day, July’s CPI came in at 0.1% (half the expectation and its lowest since January 2015); and Goldman Sachs has cut its rate hike odds to 55% for a December interest rate hike.




Asian markets were struck by selloffs overnight as the battle rhetoric rises. The Hang Seng led major benchmarks with a 0.96% loss while the Nikkei only lost 0.01% as the Yen seems to be escaping safe-haven wrath. Machine orders in Japan fell 1.9% and foreign investments fell in stocks, but climbed in bonds. The Royal Bank of New Zealand overnight decided to maintain a 1.75% interest rate level, forecasting a hike in the 2nd half of 2019.  And Australia’s consumer inflation expectations for August have dropped 2 ticks to 4.2%



Geopolitical tensions had their cost in European indexes, which ended down last week but seem to be opening in the green this morning as calming words take effect and most European CPIs came in as expected Friday. Also helping this morning were banking stocks which rose – some by up to 2.7% – and energy – up 3%. The FTSE showed its worse performance in 4 months, due to soft housing and trade figures throughout the week.



After the failure of the latest OPEC meeting to reign in production, Libyan production pushed total output for the organization by 172.6 thousand barrels per day and Nigeria – another 34k B/D. The US also increased its rig count by another 3 wells; and the result on Friday was a drop from just above the 50 mark to $48 for a barrel of WTI. News this morning that Libyan supplies are being threatened by striking port workers may provide some upward pressure. Gold is at a 2-month high thanks to North Korean tensions, ending the week at $1290 per troy ounce but steadying as the rhetoric eases. And, institutional investors have pushed Bitcoin to above $4200 – up 45% since the beginning of the month.



Snap published its quarterly earnings last week, missing expectations on all fronts: an loss per share of 16 cents on revenues of $182m (expectations were at 185.5). Shares are presently at an all-time low of 11.9. NVidia, on the other hand, beat expectations, but shares retreated on investor sentiment that the stock is still overpriced. Networking hardware leader CISCO will report its numbers on Wednesday after the New York close. EPS is expected to come in at 3 cents lower than the same period last year.


Today’s Events

9 AM GMT EU: Industrial Production
1:30 AM GMT (+1) Australia: Central Bank meeting
4:30 AM GMT (+1) Japan: Industrial Production

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