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Daily Briefing – Tuesday, November 14, 2017


The day Trump left Asia, bolstered by subservient nods of sympathy, Japan has joined other regional powers in the Trans-Pacific Partnership, a trade agreement that the US has reneged upon, to promote trade between 11 nations covering 0.5 billion inhabitants that is soon expected to be joined by Vietnam and China, as well – especially after Chinese Premier Li Keqiang called overnight for advancing free trade between China, Japan and South Korea. Meanwhile, Asian equities are trending down after China’s retail, industrial and urban investment data this morning disappointed expectations – indicating a cooling economy. In Japan, the Yen continues down after BoJ Gov Kuroda yesterday reiterated his commitment to low interest rates so long as 2% inflation remains out of reach. And in Australia, the central bank’s business conditions marker soared from 14 in September to 21 last month.



Poor earnings are pressuring European equities, with 54% of companies beating expectations, compared to 72% in the US. The CAC40 yesterday closed down 0.73%, the Eurostoxx -0.43%, the DAX -0.4% and the FTSE down 0.24%. The UK Pound stabilized somewhat after losing strength yesterday to political turmoil, while this morning, Germany reported a better-than-expected GDP reading for Q3 – 0.8% MoM, tripling the yearly reading from 0.8% to 2.3%.



US indexes closed marginally higher yesterday, as investors continue to await Trump’s tax cuts. Although growth expectations have been revised, the 3% will be sorely missed – predicting 2.2% for 2017. Yesterday’s monthly budget statement puts the government in a $62bn deficit.



With OPEC production down but shale up 80kB a day, oil continues to hesitate downward. Bloomberg this morning reports that Saudi oil exports to the US over the past 3 months have been dropping to a 30-year low in an attempt to dry out US reserves and force prices higher. October saw ½ a million barrels arrive, compared to 1.5mB a decade ago. And gold yesterday recouped some losses, only to return to the 1275 level



CISCO systems report earnings after market close today. Consensus estimates are for 60c EPS on $12.1bn. The company has beaten expectations consistently for the past 2 years, as it continues to cut back on employment but improve its public sector dominance. Tomorrow morning – Manchester United!!


Today’s Events

9:30 AM GMT UK: Retail Prices, PPIs and CPIs
10 AM GMT EU: GDP, Industrial Production and Economic Sentiment
1:30 PM GMT US: PPIs followed by the Redbook Index at 1:55
9:30 PM GMT API Weekly Crude Oil Inventories
11:50 PM GMT Japan: GDP, followed at 4:30 AM tomorrow by Industrial Production

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