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Daily Briefing – Thursday, September 28,2017

US

Pres. Trump yesterday revealed his already leaked tax plan, which calls for doubling deductions on personal taxes, eliminating death taxes and alternative minimum taxes, capping SME rates at 25% and reducing corporate taxes to 20%. Equities fell on the announcement on the lack of clarity regarding many items, but ended in the green, with the Nasdaq up 1.15%. And Dissent appeared in yesterday’s speeches by the Fed’s Rosengren, who is for regular and gradual interest rate hikes, and Bullard, who sees no reason for these. The 0.5% drop in mortgage approvals yesterday was better than August’s -9.7%; durable goods rose 1.7% – regaining a similar loss in July; and pending home sales in August fell 2.6% YoY. In Canada, the dollar is losing all of September’s post interest rate hikes following dovish comments from central banker Stephen Poloz, who expressed concern on low inflation. Following the US imposing of a 220% tariff on Canadian passenger jets, PM Trudeau has put a hold on a planned purchase of military aircraft from Boeing.

 

Europe

European equities were up to 10-week highs on banking yesterday, with the Alstom and Siemens railway operations merger helping push the Eurostoxx 0.6%. The FTSE broke a 2-day losing stream, rising 0.4% on a weakening Pound; and the Euro is at a – month low against the USD, which strengthened on Tuesday’s hawkish remarks from Janet Yellen.

 

Asia

As PM Abe dissolved parliament, the Nikkei closed up 0.51% this morning, recovering from yesterday’s profit-taking – the reason for this morning’s poor performance in China and Hong Kong: up a third in Shenzhen and down 0.15% in Shanghai, as expectations for Sunday’s manufacturing PMI is expected to show a 14th monthly increase in a row. Profit growth is at a 4-year high thanks to higher commodity prices and the government’s increased infrastructure development pace. Australian indexes was up on banking shares.

 

Commodities

West Texas Crude failed to monetize yesterday’s EIA report of a better-than-expected 1.84mB drawdown, and continues trending around $52 due to a surprise build in petrol – all this widening the WTI-Brent spread, as production in Libya continues to increase. And Bitcoin, which continues to refuse taking the Chinese crackdown seriously, sparked again above the 41 key support/resistance level after ECB Governor Mario Draghi admitted the European Central Bank is powerless against the cryptocurrency.

 

Shares

Amazon shares were up 12 points yesterday (compared to Apple’s 1.09) as the company released its new Echo and Fire-TV devices.

 

Today’s Events

9 AM GMT EU: Services, Consumer, Business, Economic & Industrial Confidence indexes
12 Noon GMT Germany: Consumer Price Index
12:30 PM GMT US: Jobless Claims, Personal Consumption, & Trade Balance, followed at 1:30 by Q2 GDP
11:01 PM GMT UK: Gfk Consumer Confidence
11:30 PM GMT Japan: CPIs, Employment, Household Spending Industrial Production & Retail Trade
1:45 AM GMT (+1) China: Manufacturing PMI

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