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Daily Briefing – Thursday, April 20, 2017


The day Britain’s parliament approved Theresa May’s call for snap elections, Brussels has begun hindering access to EU contracts for British groups. A memo published yesterday by the commission urges companies to begin considering moving away from the UK and institutions to prohibit British access to crime fighting and asylum databases. The GBP tested resistance at 1.288 unsuccessfully overnight but may have found new support along the 1.280 line. Meanwhile, 3 different European Central Bank officials at 3 different press conferences warned against ending quantitative easing too early in spite of a seeming recovery in the EU economy. Germany’s PPI remained stable last month with prices up 3.1% – as in February – and consumer inflation up 1.5%. Markets were up (except in the UK) thanks to basic resources and banking shares.


The US afternoon session once again saw share indexes tumbling, and the Dow is now testing a 2-month low. Yesterday’s IMF report on the Global Economy suggests that with corporate leverage at its highest since the 2008 financial crisis, 20 major US corporations face bankruptcy should interest rates rise further. Mortgage applications yesterday showed a 1.8% decline, following a 6.8% plunge in housing starts in March.



3 billion yuan (about half a billion US dollars) have disappeared from the books of China’s largest bank – Minsheng. Apparently bank-backed IOUs, which are widespread in inter-company payments – were found to be worthless, raising questions regarding the entire banking system. Last week, the People’s Bank of China eased some capital outflow controls, no longer requiring banks to match outflows and inflows. Meanwhile, Japan published its trade balance figures last night, showing a trade surplus that fell 500 bn Yen in March to a 1-year low, totally erasing February’s gains. The Yuan is up for the 4th session in a row after exports rose 12% in March – a 3-year high. And Australia’s NAB business confidence index remained mainly steady during this past 1st quarter.


Oil recovered somewhat yesterday after hitting a 3-week low on surging gasoline inventories.



eBay shares lost 3% after earnings per share were reported at 2 cents above last year’s Q4. Expectations had been much higher. American Express, on the other hand, gained 2.6% with earnings and sales well above expectations. Next week – Amazon.


Week’s Events

9 AM GMT Italy: Wage inflation
12:30 PM GMT US Initial & Continuing Jobless Claims
2 PM GMT EU: Consumer Confidence
1:30 AM GMT (+1) Japan: Nikkei Manufacturing PMI

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