Daily Briefing – Tuesday, May 9, 2017
The Euro yesterday pulled back from post-Macron buoyancy, falling 0.6% against the US dollar. UK shares inched 0.05% upwards on the FTSE yesterday, while the CAC40 actually closed nearly a full percent down. German industrial production gell by 0.4% MoM from February’s 1.8% increase, and the trade balance narrowed to 19.6bn Euros – well below expectations. And UK housing prices fell in april for the 1st time in 3 months, Most downward pressure across the region stems from mining stocks and a slowdown in Chinese demand. Still, investor confidence is at a 10-year high, based on yesterday’s Sentix reading
Following yesterday’s dismal trade results, today’s news is that small banks in China are suspending interbank transactions due to the demand by the nation’s regulator for hard collateral – aimed at clamping down on shadow banking. And in Japan, with the yen slightly up, wages fell 0.4% in March, a 2-year record pace, raising more doubts over floundering consumer spending and the viability of PM Shinzo Abe’s economic program. And overnight, Australian retail sales numbers disappointed traders with a 0.1% decline.
As the US ministerial comedy continues, the S&P & Nasdaq both showed another record high yesterday, but shares are cooling after the enthusiasm over French election results. Financial regulators yesterday began their examination of rules governing institutional investment risk, as regulated by the Dodd-Frank reform’s Volker rule. And Canada’s housing starts fell to 214k in April costing the Canadian dollar a third of a percent against its US counterpart. Meanwhile, Canada is escalating its lumber-based trade dispute with the US, threatening US coal exports.
Oil failed to break through the $47 level, then double bounced off of 46 overnight. Some support is being supplied by Saudi energy minister al Falih, who said yesterday that production cuts will most probably be extended to 2018.After the collapse of the industrial metals market due to China illiquidity, the sugar market continues its 6-month bearish trend and is now 30% beneath September highs.
Apple shares have recovered from their disappointing quarterly earnings downswing and are up 7%, putting market cap at above $800bn. Nvidia will report earnings today after market close, its shares down 1.5%, but after surprising expectations upwards by anything between 15 and 48% during the past 5 quarters. And finally, Snap will also be reporting its first quarterly earnings results tomorrow as strong user growth grapples with cutthroat competition. Snapchat has the youth of its users going for it – a demo that visits the app more than 18 times a day. Expected revenues are $142 mn. A deviation one way or the other from that figure will most probably send shares out of their current side-ways movement in either direction.
|8 AM GMT||Italy: Retail Sales|
|9:30 AM GMT||Australia: Budget report release|
|12:30 PM GMT||Canada: Building Permits|
|12:55 PM GMT||US: Redbook Index, followed at 2 by wholesale inventories & Jolts jobs report|
|11:50 PM GMT||Japan: Bank lending & foreign reserves.|
|1:30 AM GMT (+1)||China: PPIs|