Daily News

Daily Briefing – Tuesday, April 11, 2017

US

Indexes yesterday showed a fractional improvement on energy gains, but were weighed down by earnings season, which opens this week and caution ahead of the Easter weekend. Fed chairwoman Janet Yellen in a speech yesterday at the University of Michigan said that the bank would continue raising interest rates unless the economy, which she described as being “reasonably healthy”, shows signs of deterioration. In Canada housing starts for March increased to 253k, well above expectations at 216 YoY.

 Europe

BBC news magazine Panorama yesterday revealed that the Bank of England in 2008 pressured banks into lowering their Libor (interbank) lending rates. The revelation indicates that witnesses before the Parliament inquiry had been lying. The FTSE was slightly down on regional instability but managed to open this morning with a quarter percent gain as other European benchmarks are mainly in the red. Also, producer price indexes are beating expectations while retail prices are at a surprising low of 0.3% after February’s 1.1% increase and yesterday’s BRC retail sales at a 2 year low. Inflation is at a steady 2.3%. Meanwhile, the European Central Bank has increased its bond buying holdings by about $2.4 bn. Bank president Mario Draghi in the annual report states that the zone’s economy is “on its firmest footing since the (2008) crisis” despite uncertainties. And Germany’s sentiment indexes rose beyond expectations to 19.5 (economic) and 80.1 (current) following yesterday’s Sentix confidence marker for the Eurozone beating expectations at 23.9. ZEW’s EU sentiment came in at a very green 26.3 but inductrial production for the zone disapointed at 1.2 for February (MoM). sHolding the Euro at a steady rise against the USD are election expectations for France towards the end of the month.

Asia

Chinese markets ended up overnight on commodities strength and in spite of geopolitical tensions in Korea and Syria. The Hang Seng, however, lost 0.7% and the Nikkei 0.4%. Overnight, Bank of Japan Governor Haruhiko Kuroda described to the Japanese parliament options for exiting its QE program. These include raising interest, reducing bond holdings, liquidity reduction and more. Earlier this morning, the National Australia Bank revealed its business conditions index at the highest since the global finance crisis in 2008.

Commodities

Oil prices steadied during the Asian session overnight following a 5-day winning streak resulting from Libyan production going off line again due to a local militia blocking the pipeline. Soviet news agency TASS reports that Russia will soon begin consultations on extending the OPEC production freeze deal. And Saudi officials are reportedly discussing with BP, ENI, Chevron and other firms gas ventures and diversification ahead of the privatization of ARAMCO.

Week’s Events

12:55 PM GMT

US: Redbook Index, followed by JOLTS Job openings at 2.

8:30 PM GMT

API Weekly Crude Oil Inventories

11:50 PM GMT

Japan: Corporate goods price index, machinery orders & bank lending

0:30 AM GMT (+1)

China: Producer Price Indexes

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