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Daily Briefing – Monday, October 9, 2017


After better-than-expected jobless claims on Thursday, Friday’s non-farm payrolls shocked observers by plunging for the first time in 7 years. The -33K print was only offset by a 0.4% increase in hourly earnings to 2.9% and a similar increase in labor force participation to 63.1%. The USD plunged in retaliation pushing gold up by 25c to the Troy ounce. Goldman Sachs preferred to look at the lily, announcing that the general report (whose results are being contested as erroneous) have pushed chances of a December interest rate hike to 80%, plunging equities into the red, with the S&P losing 0.11%. And as if to add some flames to the political fire, the Trump administration has decided to up the tariffs on Canadian Bombardier passenger jets to 300%, after slapping on the initial 220% last week.



The FTSE ended its best week of the year as the GBP fell on talks of yet more snap elections as PM May comes under fire and pressure mounts for her to resign. House prices in September increased 0.8%, a tapering off from August’s 1.5%, and the pound this morning is regaining some losses after VISA reported that consumer spending in the UK increased in September by 1.4%, after falling in August. France’s trade deficit fell to –4.5, in August, primarily on excellent aerospace, industrial and agricultural exports. And manufacturing orders also surged in Germany by 3.6% following a 0.4% decline in July. And in Turkey, the Lira has plummeted after the US and Turkey stopped issuing tourist visas to one another.


Chinese investors returned to the scene this morning to find service sector growth down sharply to a 21-month low in September – the Caixin print showing 50.6 following August’s 52.7. Indexes were up to 21-month highs, the Shenzhen Composite a stunning 1.93%. Otherwise in Asia, only the Hang Seng showed a 0.36% decline after hitting 10-year highs on Friday, while Nikkei was up 0.3% as the Yen strengthens against the dollar. And the NZD is at a 4-month low after a renewed weekend failed to discern a clear winner in the country’s general elections.



Gold opened the week with a 25 cent gap in Asian trading following Friday’s dismal NFP print. And oil lost nearly a dollar of its barrel price, despite yet another Baker-Hughes rig-count drop, after Saudi oil Minister Al Falih said he doubted whether November’s OPEC meeting would result inan extension of the organization’s agreed upon production freeze. Monday morning saw WTI at 49.10 in Asia – a 3-week low.


Quarterly earnings begin in seriousness this week, with Citibank reporting Thursday and Bank of America on Friday. Goldman Sachs expect a 7% growth in US sales thanks to a weak USD and “solid economic activity”. EPS projections are high compared to the dismal expectations that have ruled the markets since 1985. Costco shares were down 6% after beating expectations despite the retail slump over on-line retail.


Today’s Events

8:30 AM GMT

EU: Sentix Investor Confidence

11:01 PM GMT

UK: BRC Same Store Retail Sales

11:50 PM GMT

Japan: Trade Balance

0:30 AM GMT (+1)

Australia: Business Confidence

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