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Daily Briefing – Thursday, August 3, 2017

US

President Donald Trump yesterday reluctantly signed a new Russian sanctions bill, setting off what is being referred to as a “full-scale trade war”. The Russian president responded almost immediately, referring to the Trump administration as incompetent. The 6% surge in Apple shares yesterday contributed to a 52 point increase in the Dow, pushing the USD down to a 27-month low. The Nasdaq, closing 0.01% down was less impressed. Mortgage applications were down 2.8% and the ADP employment change, at 178K puts manufacturing jobs at a 6-month loss. The USD dipped on the ADP report but has recovered losses.

 

Europe

European stocks slid yesterday on banking shares. The zone’s Producer Price Index rose by a better-than-expected 2.5% YoY but continues to slide on the monthly scale. And UK construction fell from 54.8 in June to 51.9 in July. Traders are watching the Bank of England’s policy decision today for signs of a returning consensus as inflation falls.

 

Asia

Asian equities were mainly down yesterday as investors await a post-Apple-surge correction China’s service sector grew at a slower pace in July based on this morning’s Caixin services PMI, as the non-manufacturing P<I fell to 54.5. New Zealand’s trade surpluss fell by half to $856m on a 1% drop in exports.

 

 

Shares

Yesterday’s quarterly earnings report from Tesla a better-than-expected $1.33 loss-per-share on – again – better than xpected revenue: $2.79bn for Q2. The company is reportedly spending $13 million per day. Shares rose 4.6% in late trading Wednesday. Apple shares yesterday performed a 6% $10 bull gap, following its earnings report on Tuesday.Today: Yelp, Siemens and Allianz.

 

Commodities

WTI dipped yesterday following the EIA reading of a 1.5 million barrel drawdown, which confirmed yesterday’s disappointing API. It recovered overnight and is back above the $49 mark. At fault – rising OPEC output despite US tightening. R

 

Today’s Events

7:15-8:30 AM GMT

EU: Markit services and composite PMIs from Spain, Italay, France, Germany, the EU and the UK, followed by EU Retail sales at 9.

11 AM GMT

UK: Monetary policy and interest rate vote

12:30 PM GMT

US: Jobless claims, followed at 2 by Markit PMIs and factory orders

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