Daily Briefing – Thursday, October 26, 2016
The Euro is up 0.14% this morning after Germanys record high business confidence – 116.7 – yesterday is followed this morning by a slight drop in consumer confidence from 10.8 to 10.7 in November. Also pushing the momentum are expectations of Mario Draghi today to announce a cutback to the central bank’s bond-buying program. The Turkish Lira hit new lows after the German finance ministry told Bloomberg it had instructed German banks to review their loans policy to Ankara. Meanwhile, in Britain an unexpected 1.5% quarterly GDP increase (YoY) pushed the GBP up 130 pips against the US dollar; and the British Retailers Consortium this morning announced that UK retailers have been cutting jobs at their fastest pace since 2008.
The Canadian dollar tanked last night by more than 100 pips after the central bank decided to maintain current interest rates – especially after a Teranet report showed home prices declining across the nation by nearly a percent in one month. In its statement, the BoC affirmed that inflation had picked up and that economic growth in the 2nd half of 2017 is expected to be “moderate”. In the US, new home sales jumped 19% to 667 thousand in September – the biggest increase in 25 years following a 3.6% decrease the month before; and durable goods also performed better than expected with a 2.2% increase.
Foreign investments in Japan fell overnight, and export/import prices in Australia continue to decline – albeit at a slower pace (-3% and -1.6% respectively). New Zealand’s trade deficit continues to raise concern, coming in at a worse-than-expected $-2.9bn (YoY) for September. Both the Yen and the Nikkei closed in the green this morning, as did most Asian indexes, except the Hang Seng (-0.3%) and New Zealand’s Dow Jones (-0.42%).
Oil is trending slightly lower this morning after the EIA published an 856kB build in oil reserves, despite expectations of a 425kB decline, based on API numbers.
Visa beat estimates by 3c EPS on an 11% increase in profits, and likewise Coca-Cola by 9c, today we have a flurry of high-tech companies reporting, including Google (expect EPS=$8.43 on revenues up 20% to $21.94bn), Twitter (expect EPS=7c on revenues down 4% to $590 mn), Baidu (expect EPS=$1.96 on revenues up 26.7 to $3.47bn), and Bayer (expect EPS=$1.05 on revenues of $13.41). Amazon will report after market close, with expectations of 2c EPS – down from 52 – on revenues $42 bn – subject to the results of the Whole Foods takeover. Despite being closely hounded by the competition, Intel is expecting to pay out 80c per share on $14.73 bn revenues – a tad lower than last year’s figure. And finally, as it sallies forth into the “365” Cloud and AI, Microsoft is expecting an EPS of 71c on $23.51bn revenues. Also this morning, DeutscheBank reported quarterly profits doubling and expenses declining by 14%; and Barclays reported earnings per share up to 3.7pence on pre-tax profits of £1.11bn.
|11:45 AM GMT||EU: Interest Rates & policy|
|12:30 PM GMT||US Jobless Rates and Wholesale Inventories, followed at 2 by Pending Home Sales.|
|11:30 PM GMT||Japan: Consumer Price Indexes|
|0:30 AM GMT||Australia: Producer Price Indexes|