Daily Briefing – Thursday, September 14, 2017
Asian markets overnight bit a bitter bullet on Chinese data, all ending in the red. The Shanghai Composite lost a 1/2 % and the Nikkei 1/3. Collapsing Chinese credit generated weak retail sales (10.1%), industrial production (6%) and urban investment (7.8%) this morning – all below expectations and for the latter 2 below July data. Urban investment are the slowest in 2 years as the government places restrictions on the metropolitan market, while industrial production is being hampered by increasing credit costs and property restrictions. Meanwhile, the Australian jobs market is sallying forth with new jobs doubling in August to 54k and participation up 2 tenths.
European equities were mixed yesterday after the EU reported a less than expected increase in industrial production – 3.2% over June’s 2.8%, but a 0.4% rise in employment change for Q2. The European Auto Manufacturers’ Association reported this morning that new car sales are rising but not in the UK, where real wage growth remained steady as unemployment fell to 4.3%.
US indexes have pulled back slightly from a 3-day rise on fears of profit taking. Producer inflation rose less than expected (2.4% over July’s 1.8%) and the government’s monthly budget statement showed a better than expected $108bn deficit for August. The USD is on a slight rebound as markets get optimistic on Trump’s tax reform.
Despite huge gasoline draws in the US due to production disruptions, the EIA reported a 5.9mB inventories build last night, keeping WTI stable at 49.18 following a spike at the start of the Asian session. Gold has erased most of its Tuesday gains on improved inflation and risk.
|11 AM GMT||UK: Interest Rate Decision|
|12:30 PM GMT||US: Jobless Claims & CPIs|
|10:30 PM GMT||NZ: Business PMI|