Daily Briefing – Monday, July 10, 2017
The FTSE swung up on Friday as the pound fell on weak data. Industrial production, manufacturing, house prices and the nation’s trade balance contracted into the red. The Deloitte accountancy firm this morning released a survey indicating that major British companies are pessimistic regarding the British economy’s post-Brexit recovery. Deloitte survey’s serve as a major component in the Bank of England’s own investment policies. Other European benchmarks didn’t fare as well as the FTSE due to falling oil prices and the hawkish shift in central bank policy hints. German exports and imports improved this morning, rising 1.4% and 1.2%, respectively, with current accounts up to 17.3bn Euros – this after Friday’s 5% doubling of industrial production for May YoY, bringing it to a 3-month record high. French industrial output also increased 1.9% after April’s 0.6% decline.
Once again ignoring Thursday’s dismal ADP employment change, Friday’s June NFP beat expectations by 70K. Household employment also improved, as did labor participation. Earnings, however, rose by 0.2%, missing expectations. Stocks and the USD jumped on the announcement, the S&P closing up 0.2% and the Nasdaq 0.4%. The USD, on the other hand, lost momentum as the session ended and continues trending sideways this morning with a slightly bearish inclination. Excellent employment data from Canada on Friday also helped spike the CAD by 70 pips, increasing chances of a hike in the country’s interest rate on Wednesday.
China’s consumer inflation remained steady in June, based on overnight data. Producer prices rose for the 10th month in a row, 505% in May and June. China’s CPI also launched the Australian Dollar, which then erased gains as the session ended. Asian markets ended up thanks to US equity recoveries and an increase in beleaguered oil prices – the Nikkei riding up 0.37% on a weakening Yen, ascribed to last night’s announcement of a severe drop in Japan’s trade deficit – minus 115bn Yen from April’s 554bn Yen surplus. The Bank of Japan’s regional report this morning expresses optimism while governor Kuroda in an accompanying note promises to continue a loose policy until inflation hits 2%.
After recognizing Bitcoin as a commodity in 2015, the US Commodities Futures Trading Commission (CFTC) last week approved the first swap facilities, thus enabling trading on the coin. Next up – ETFs. Gold ended the week at a 4-month low on US labor data Friday. And oil lost 4% during the week, ending down on the Baker Hughes count (up 7 rigs after last week’s drop). This morning sees a rebound in the commodity on news that OPEC may cap Nigerian and Libyan supply.
|8:30 AM GMT||EU: Sentix Investor Confidence|
|7 PM GMT||US: Consumer Credit Change|
|11:01 PM GMT||UK: BRC Retail Sales|
|1:30 AM GMT (+1)||Australia: NAB Business Confidence|