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Daily Briefing – Tuesday, September 19, 2017


After sending the pound dramatically up on hawkish comments, Bank of England Governor Mark Carney has walked back comments, saying that interest rate hikes will be “limited and gradual”. Speaking in Washington, Carney also said that the British economy is expected to underperform until the middle of next year –pressuring the pound down slightly. Concurrently, the UK’s Center for Economic & Business Research upgraded the economy yesterday by 1/10th of a percent. Otherwise in Europe, stocks ended Monday in the green thanks to an easing of N.Korean tensions and strength in Asian equities. Core inflation increased to 1.3% in August – a 4-month high.



The Yuan is at a 2-week low after falling for 8 consecutive days – a boon but also a problem for exporters. According to Bloomberg, the PBoC will be meeting later today to discuss the opening of financial markets to foreign investors. With all Chinese indexes in the red this morning, the Nikkei shone with a 1.96% increase to a 2-month high led by insurance shares and exporters who are enjoying a plummeting yen. Helping the Yen drop are PM Abe’s call for elections and uncertainty about replacing BoJ Chairman Haruhiko Kuroda at the end of his 5-year term. Meanwhile, in Australia, the RBA’s meeting report shows officials optimistic on the jobs market but concerned about household debt and the AUD’s strength.



With the House-builders’ association yesterday reporting 3-point drop in the index to 64 in September, eyes are on today’s data ahead of tomorrow’s FOMC meeting. The Senate yesterday passed a huge defense policy bill, which focuses primarily on acquisitions (90%). Stocks yesterday ended slightly up thanks to banking shares but tempered by tech stocks.



As gold drops a percent overnight (the most since July), Bitcoin recovered $1100 from recent losses and is now above the 4100 mark, as traders realize that China’s attempts to curb the decentralized currency (which is proving to be an effective tool for capital outflows from the land) are less than successful. Yesterday, the Wall Street Journal reported that China plans – beyond shuttering exchanges – to clamp down on the trading channels themselves, including trading websites and local “miners”.



As traders await today’s Q1 report from FedEx, Toys-R-Us last night filed for bankruptcy – seeking to restructure its $5bn-worth of loans. On one hand, FedEx is still suffering from last year’s cyberattacks in Europe; on the other hand, management is waiting to see how users respond to added fees. And in Hong Kong, expect Alibaba subsidiary ZhongAn Insurance expects to raise about $1.5bn next Monday. The company is China’s first online insurer and focuses on insuring online retail purchases and flight & smartphone insurance.


Today’s Events

9 AM GMT EU& Germany: ZEW Economic Sentiment and Construction Output
12:30 PM GMT US: Building & Housing, Imports & Exports, and the Redbook Index at 12:55
8:30 PM GMT API Crude Oil Inventories
11:50 PM GMT Japan: Trade Balance

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