Daily Briefing – Monday, November 6, 2017
At 261K, Friday’s NFP was better than last month’s but less than expected. The report shows as increase in mining and manufacturing jobs, while retail and information technologies seem to be weakening. In addition, the participation rate fell by ½ a percent to 62.7% – a 40-year low – and average hourly earnings also slipped to 2.4% YoY, putting it at a flat zero on the monthly scale. Also, factory orders increased by 1.4% in September, Markit’s non-manufacturing PMMI rose to 60.1 while services fell to 55.3 and September’s trade deficit grew to $43.5 bn. In Canada, unemployment rose to 6.3 from September’s 6.2, and the international merchandise trade deficit remained sadly steady at $3.18bn.
After a weekend during which President Trump, on his Asia tour, complained about unfair trade relations, and President Abe’s call for increased militarization vis-à-vis North Korea, the Yen began the week by slumping more than ½ a percent on panic sales to an 8-month low against the USD. Adding to the fuel, BoJ governor Kuroda said that the Yen should be further weakened to achieve 2% inflation. Asian markets began the week generally lower, with the Hang Seng down 0.04% and the Nikkei up a mere 0.11% as banking weakness offsets strength in retail shares. The Shenzhen Composite ended this morning at a 1.41% gain despite profit-taking after Chinese central bank head Zhou Ziaochuan fed concerns over a crackdown on leveraged investments – this after the Caixin services PMI rose to 51.2 in October.
In Germany this morning, factory orders surprised with a 1% increase for September after Markit’s services PMI for the UK rose 2 points to 55.6 in October – this amidst a report from the Chartered Institute of Procurement and Supply (CIPS) that 63% of European companies expect to move out of post-Brexit Britain. . Markets closed last week slightly in the green, and both the Euro and GBP are beginning the week flat.
Oil soared by a dollar forty during the Asian session after the Baker Hughes rig count dropped by another 8 active oil wells to 729 – its highest drop in a year and a half. WTI is currently at $55.82 and in a slightly bullish incline thanks to the princely purge in Saudi Arabia, which has consolidated the reformist king’s power.
After 2 people showed up for the iPhone-8 launch in Hangzhou China last month, Friday’s iPhone-X launch fulfilled expectations, with the understated 20 million units sold out in minutes. Apple shares spiked at $173.46 – a $5 opening gap. Today, after the New York Close, GoDaddy will announce its quarterly earnings. Expected EPS is 8c, up from last year’s 5c. Last quarter the company beat expectations , providing a 31c EPS on revenues of $557 mn – up 22.3% from last year.
|8:15 – 9 AM GMT||Markit PMIs for Spain, Italy, France Germany and the EU, followed by EU PPIs at 10.|
|3 PM GMT||Canada: Ivey PMIs|
|3:30 AM GMT (+1)||Australia: RBA Interest Rates|