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Daily Briefing – Monday, May 29, 2017


The GBP posted its worst decline in 4 months Friday after opinion polls showed May’s conservatives at a support low – weakening her stance vis-à-vis European Brexit negotiators. Q1 GDP was once again revised down to 2% YoY, and the FTSE ended the week up 0.4%. Other European indexes were pressured down by energy stocks as the G7 meeting ended in German/US discord. However, last week’s sentiment indicators for the zone were up and the manufacturing PMI rose to 57.


Asian markets are muted in their reaction to yet another North Korean missile launch Monday, with the Hang Seng up 0.25% this morning and the Nikkei flat. On Friday, Japanese and Australian benchmarks were hard hit by falling oil prices, the S&P/ASX losing 0.78%. Reacting to last week’s downgrade by Moody’s, China has once again changed its forex regulations to lower rate volatility on Thursday, providing central bank authorities with further control over Yuan levels. The result was a 7.76% surge in Yuan interbank rates.


With US markets closed today for Memorial Day, mortgage rates have tumbled to a 6-month low following last week’s disappointing housing data. On Wednesday, existing home sales fell 2.3%. US GDP estimates for Q2 have been revised upwards towards 1.2% YoY, following a dismal performance in Q1. Improvements are thanks to reduced inventory investments and government spending and an increase in business investments, consumer spending and local/state spending.


Senior Saudi oil officials told Bloomberg on Friday that they would reduce exports to the US by 15% starting in June in an attempt to curb the latter’s inventories. Friday’s Baker Hughes oil rig count increased by 2 more units, as US production is at a 21-month high.  And bitcoin fell $900 from its week-long high of $2760 on Thursday, only to recover the following day, leaving prices up 17% for the week.


NVIDIA stocks have been on an uphill run since the announcement Friday of SoftBank’s $4billion investment in the company. SoftBank owner Masayoshi Son is considered to be Asia’s version of Warren Buffet, and his seal of approval for a company is respected by all.

Week’s Events

9 AM GMT Italy: Trade Balance
1 PM GMT EU: Speech by ECB Pres Mario Draghi
10:45 PM GMT New Zealand: Building permits, followed at 1:30 am by Australia’s data
11:30 PM GMT Japan: Unemployment, household spending & retail trade

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