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Daily Briefing – Thursday, October 12, 2017


European Central Bank economist Peter Praet yesterday announced that the bank has not achieved its inflation targets, even as the institute prepares to begin winding down its bond-buying program. After Germany raised growth projections for the quarter yesterday, this morning’s consumer inflation numbers begin coming in with France missing expectations. The UK’s surveyers’ Union yesterday published its house price index, showing a steady 6% for September over expectations of a decline to 4%. That plus Philip Hammond’s negative outlook on the post-Brexit economy have failed to subdue the GBP, which rose in the Asian session, and continues upwards this morning.



The Nikkei continues to celebrate at 20-year highs, closing this morning up 0.34% – even as the yen continues appreciating and the nation’s tertiary industry regresses 0.2%, over August’s 0.1% growth. Leading the index rally was the KOSPI with a 0.68% increase on tech stocks, especially Samsung which is up 52% on the year. The Hang Seng also added 0.44%, while the Shenzhen and Shanghai Composites both ended in the red. Australia’s consumer inflation reading this morning came in at 4.3%, a 1.5% jump over September, with home loans also up a percent.



Fed officials were surprisingly concerned about continually low inflation, reversing hopes of a December interest rate hike, and prompting a 2% drop in the USD overnight. There seems to be little consensus regarding policy, as JOLTS yesterday reported a lower-than-expected number of job openings, and mortgage applications dropped from -0.4% in September to -2.1% in October.



Breaking an optimistic 2-day surge, WTI is stuck just below the $51 mark after the API yesterday reported a 3.1 million barrel inventory build – the reaction only muted thanks to a 1.6mB drawdown in petrol stocks. Reports about a strained shale industry alongside hints that OPEC may undertake “drastic” measures to re-balance the equations are being strengthened by OPEC forecasts of increased demand this year and next.



Quarterly earnings reports begin today with Citibank JP Morgan and Domino’s Pizza. Both banks have benefited from this year’s interest rate increases. Citi shareholders may expect a return per share of $1.30 on $17.73bn revenues, up from last year’s 1.25. JPMorgan shares are at a record high of $97.64. Expect an EPS of $167 on $24.99bn. Domino’s is expecting to pay $1.21 per share on $623.72mn. The company has beaten estimates over the last 4 quarters.


Today’s Events


EU: Industrial Production

12:30 PM GMT

US: Producer Price Index & Jobless Claims


EIA: Crude Oil Inventories Change


China: Trade Balance

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