Daily Briefing – Tuesday, July 25, 2017
The EU is celebrating this morning after Polish President Andrzej Duda surprisingly vetoed judiciary reform bills, one of which would have given parliament control over the body that appoints judges. Bloomberg, on the other hand, reported last night that DeutscheBank is shifting $350 bn worth of assets (roughly 20% of its 1.6 tn Euros portfolio) from London to Frankfurt as its investment operations are being migrated fr4om a post Brexit Britain back to the continent. Japanese banks Daiwa, Sumitomo Mitsui Financial Group, and Nomura have indicated they are following suit. Yesterday’s disappointing PMIs reflected later in the day in drops across the equities board – the DAX losing 0.25% and the FTSE a full percent.
US home sales posted their weakest selling season in 6 years, as home sales plunged 1.8% in June. The news comes at the heels of excellent manufacturing and services PMIs – 53.2 and 54.2 respectively – a 6-month high for the former – and in keeping with 2% annualized GDP growth.
Asian markets continue to be subdued ahead of Thursday’s FOMC meeting. Last night’s Bank of Japan meeting minutes reveal discord amongst policymakers regarding the transparency of QE emergence. The Yen continues to rise placidly while indexes across the continent closed in the red.
Google shares fell after announcing quarterly earnings yesterday at 20% above last year’s figure. EPS was $5.01 – above estimates – although CPS is down 5% YoY and earnings were hit hard by last month’s $2.7bn fine from the EU. Net income came in at $2.5 bn on $26 bn of sales. Today, MacDonalds reports before the New York opening. Expectations are for $1.62 earnings per share – up from last year’s second quarter of $1.45.
Oil traders were pleased yesterday when the commodity regained half of the previous day’s losses before New York markets opened thanks to Barclays unloading its oil book – most of it comprised of higher-than-value exotic options. Helping to maintain the trend, OPEC members meeting yesterday in Russia announced production pullbacks from Saudi Arabia and Nigeria, the latter of which until now was exempt from the freeze deal. Meanwhile, Goldman analysts are telling investors to expect a surge in Bitcoin to above the $3,000 mark. Yesterday, the US Commodities Futures Trading Commission granted LedgerX a license to serve as a derivatives trading platform for the cyber-currency.
|8 AM GMT||Germany: IFO Business Climate & Expectations|
|1 PM GMT||US: Housing Prices|
|10:45 PM GMT||New Zealand: Trade Balance|
|1:30 AM GMT (+1)||Australia: CPIs|