Daily Briefing – Thursday, July 27, 2017
Losing patience, the EU has given Poland one month to rescind discriminatory legislation governing the country’s judiciary. If Poland forces judges to retire, they could lose voting rights within the European Council. Additionally, EU Commission head Juncker and German Foreign Minister Sigmar Gabriel have warned the US that Europe would probably ignore the US’s newly voted sanctions against Russia, since these impinge upon their commercial interests. Meanwhile, in London, the Bank of England is warning against soaring consumer debt. Yesterday’s mortgage approvals reading was better than expected, as were retail sales in Spain and confidence measures in Italy. German consumer confidence, reported this morning, was up to a pleasing 10.8 and Spain’s unemployment was down to 17.22% from last quarter’s 18.75%. European indexes all closed up on excellent quarterly earnings reports.
Markets are reacting this morning to the Fed’s dovish tone last night in their policy statement, that owned up to weak inflation and raised expectations for an “unwinding” of the central bank’s balance sheet. Yesterday, home prices disappointed, the median price actually dropping YoY from $345.8K to 324.3K.
Asian markets took the FOMC’s statement with relative equanimity, the Shenzhen regaining the previous day’s 1% loss and the Nikkei boosted another tenth of a percent thanks to Nintendo. Tech also helped the Kospi up a third, while the S&P/ASX also gained on continued commodity strength. And in China, Industrial Profits rose by 19% YoY in June – 3% higher than in May – sending the AUD up 0.67%.
Drama was the key word at yesterday’s Facebook earnings report release when Bloomberg published erroneous EPS data, sending stocks 5% before they recovered. The company beat revenue estimates by $0.04bn for a total of $9.32bn, active users and ad revenues, sending out an EPS of $1.32. Coke and PayPal also performed well – the latter sending stocks soaring 2% in late trading Wednesday. Today, expect results from Amazon, BNP, Paribas, Baidu, Barclays, Fiat Chrylser, Intel, Samsung, Starbucks, Twitter, Vodafone and Yahoo.
Oil was once again gaining strength this morning after last night’s EIA confirmation of Tuesday’s API drawdown. The administration’s reading shows a 7.2 million barrel withdrawal. At 48.70, WTI is now pausing, up 5% for the week, but demand is rising strongly in China, India and other developing economies.
|10 AM GMT||UK: CBI Trades Survey, followed at 11PM with the Gfk Consumer Confidence Index|
|12:30 PM GMT||US: Jobless Claims, Wholesale Inventories, Goods Trade Balance & Durable Goods orders.|
|11:30 PM GMT||Japan: CPIs, Jobs/Applications & Unemployment, Household Sales, Retail Trade and BoJ Summary of Opinions|
|1:30 AM GMT (+1)||Australia: PPI|