Daily Briefing – Monday, October 30, 2017
In Europe, as Spain prepares to prosecute Catalonian leaders, the region’s government has begun investigating e-residency programs, as practiced in Estonia. Supporting its innovative approach to nationalism, Estonia is preparing to a national cryptocurrency – the Estcoin, which is expected to launch soon, marking the first ICO (Initial Coin Offering) by a national government. This will enable the creation of a cross-border “national” economy. Meanwhile, further west, UK retail sales are at their worst in a decade (-36), based on Bloomberg reports, as inflation puts the squeeze on shoppers; and the BRC reports its fastest drop in retail employment over the same period. Italy, on the other hand, has been upgraded by S&P, as investments rise and banking risks diminish – all hinting at a possible economic recovery.
Following Friday’s surprise 3% increase in GDP, 1.5% in personal consumption, analysts are looking at the US real estate market, which has prices at pre-2009 highs. The result was seen on Thursday, where alongside worrying increases in jobless claims and the goods trade deficit, pending home sales decreased by a numbing 5.4% YoY. Q3 sales of office properties in Manhattan have plunged 67% YoY, as Chinese buyers abandon the market, hampered by new regulations back home against cross-border transactions.
Chinese equities took a slide this morning due to bond market and deleveraging concerns tapering investments. The Shanghai Comp was down nearly 0.8% and the Hang Seng, nearly 0.4%. Japanese retail trade disappointed with a 2.2% increase YoY, and the Nikkei’s 2-month surge seems to have hit a snag. Commodity gains over last week helped push up Australian and New Zealand markers, the S&P/ASX up 0.27% and the DJ-NZ up 0.7%.
Oil added a steep dollar and a half Friday, bringing Brent above the 60 mark, after Saudi Crown Prince Mohammed bin-Salman reiterated he would press towards extending the production freeze, weaning his country’s economy away from oil and reassuring markets that the ARAMCO IPO is still on the table.
Another good week of quarterly earnings focused on Amazon, which beat expectations resoundingly (a billion and a half above sales expectations, and more than 10 times the expected EPS), sending shares above the 1000 mark. Similar performance have Intel shares at a 17-year high. On Wednesday, Facebook, Alibaba, GoPro, Tesla and Yelp will attempt to echo the success, and on Thursday – Apple and Starbucks.
|9:30 AM GMT||UK: Consumer Credit & Mortgage Approvals|
|10 AM GMT||EU: Consumer, Business, Economic & Industrial Confidence, followed by Germany’s Consumer Inflation qt5 1 PM.|
|12:30 PM GMT||US: Personal Spending, Expenditures & Consumption|
|11:30 PM GMT||Japan: Unemployment, Household Spending & Industrial Production, followed at 2 AM by the BoJ’s Interest Rate Decision|
|1 AM GMT (+1)||China: Manufacturing & Non-Manufacturing PMIs.|