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Daily Briefing – Thursday, November 9, 2017

Europe

Signs that the European economy continues to struggle appeared in data over the past day, despite a positive GDP growth number, excellent PMIs on Monday and retail sales reports on Tuesday. Stocks pressure was downwards for the 2nd day in a row on banking equities, the FTSE losing 0.14% and the DAX 0.06% Yesterday’s trade deficit in France came in at a better-than-expected €-4.669B, as the Bank of France projected a 0.5% growth in the economy for the year’s final quarter; and this morning’s German surplus increased by ½ a bn to €21.8B. UK house prices grew at a mere 1%, down from 6% in September, after the Bank of England raised borrowing rates for the first time in a decade.

 

Asia

Asian indexes overnight were mostly positive, with the Nikkei down on a panic-driven Yen. The benchmark, however, did manage to top 23000 for the 1st time in 25 years. The Shenzhen composite added 0.93% and the Hang Seng, 0.84% after a consumer inflation rose to a 9-month high reading in China – 0.1% MoM in October – missing expectations of 0.2%, putting the yearly reading at 1.9% – better than the expected 1.8. Producer inflation remains steady at 6.9%. Home loans in Australia contracted by 2.3% and investments by 6.2%, after being well into positive territory in August, pushing the AUD slightly up and the ASX by ½%. And the NZ Dollar also gained as the central bank left its monetary policy unchanged.

 

US

The USD continues to struggle over tax cut uncertainty, as Pres. Trump arrives in China to discuss the US trade imbalance. The Daily Mail, quoting an AMA report, states that healthcare spending now accounts for $3.2tn – about a fifth of the total US economy. Housing starts in Canada improved at 223K new units in October, with building permits crossing into positive territory at 3.8% in September, as the nation faces a potential immigrant-generated housing shortage.

 

 

Commodities

Oil continues downward after a technical glitch, as the EIA reported a 2.24mB build. Gold has had its worst Q3 growth figure in 8 years, as global demand fell 9%. And, after losing $1200 from its $7750 high, Bitcoin this morning recover half its losses and is currently trading at $7400 – this after interest in the asset renewed in China, which instead of banning trading is likely to develop regulatory supervision.

 

Shares

Tencent holdings has agreed to buy a 10% stake in SNAP. Shares surged back to pre-quarterly earnings (which were dismal) levels and have settled halfway in the $11 region. Siemens this morning missed quarterly earnings expectations – revenues up to €22.3bn, pushing shares down 2.7%; Deutsche Telecom profits fell 52%; and Adidas profits leaped to €526bn. from €386bn last year. Today, NVidia will report after the New York close. Analysts are expecting an EPS of 94c, up 10% from last year, on sales of $2.36bn, as the company strengthens its position vis-à-vis blockchain infrastructures. At the same time, Disney is expected to report earnings of $1.12 per share on revenues of $13.14bn, as talks continue of the company’s purchase of rival 21st Century Fox and despite the underperformance lately of subsidiary ESPN.

 

Today’s Events

10 AM GMT EU: Economic Bulletin & Economic Growth Forecast
1:30 PM GMT US: Jobless Claims, followed at 3 by Wholesale Inventories
0:30 AM GMT (+1) Australia: RBA Monetary Policy Statement

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