Daily Briefing – Monday, September 11, 2017
Asian markets this morning are closing in the green as North Korean tensions stabilize. The Nikkei is up 1.4% as the yen retreats 0.55% on recovering risk appetites. China has halted attempts to curb currency speculation by removing reserve requirements for financial institutions dealing in FX forwards, thereby encouraging the shorting of the Yuan after the currency soared to the point of threatening exports, which were reported down to 5.5% on Friday. The currency had gained nearly 8% against the USD since the beginning of the year. So far today, the Yuan has tumbled 0.5% to 6.45 against the dollar. Japan’s GDP for Q2 was also revised down on Friday to 2.5%, even as its current growth spurt is the longest since 2006. Machinery orders reported overnight doubled expectations MoM but are down -7.5% in the yearly figure.
The USD has marked its 7th day of drops in a row – the worst in 4 months, as FED tightening aims to continue, Trump capitulates to Democrat debt ceiling demands, North Korea rants, and hurricanes threaten the nation’s wellbeing. Besides erasing 0.4% of the state’s Q3 GDP, Hurricanes Harvey and Irma have now prompted Goldman to lower its GDP projection by 30% to an even 2%. The announcement, however, also projects a boost over the consequent quarters due to recovery economics. Meanwhile, DeutscheBank’s Chief Analyst, Dominic Konstam is calling on the US FED to pause its monetary tightening activities for the time being in order to prevent a recession. Meanwhile, Friday’s consumer credit – at $18,5bn – change beat expectations while mortgage rates fell to a 10-month low. In Canada, unemployment fell a tick to 6.2%.
On Friday, ECB President Mario Draghi attempted unsuccessfully to abate fears of additional quantitative easing. German imports surged 2.2% in July while exports only managed 0.2%, the latter despite a 12% increase in the Euro against the US Dollar. And in the UK manufacturing production surprised upwards at 0.5% for July, and Visa announced that domestic spending was slightly up (0.13% in August). Also, some rosy news from the Z/Yen Global Finances Center, which rates financial centers across the world: Despite Brexit, London remains the world’s top financial center, 24 points head of New York. Frankfurt is at number 11, up from 23 last year, while Dublin is up 3 places to number 30.
Bitcoin has been taking a beating over a report on China’s Caixin website that the government intends to shut down unauthorized local virtual exchanges. The currency is currently in the 4100 region after touching the 5000 mark last Friday (the 1st). Gold hit a new high of 1360 on Friday as the USD index crashed towards 91 cents. Both have recovered slightly this morning, the metal opening in Asia with a $10 bear gap. And oil was recovering nicely this morning after Friday’s rig count saw a further 3 rig reduction to a 3-month low, as Texas production all but closes down.
|12:15 PM GMT||Canada: Housing Starts|
|1:30 AM GMT (+1)||Australia: NAB Business Conditions|
|2 AM GMT (+1)||China: Foreign Direct Investments|