Daily Briefing – Wednesday, April 12, 2017
As United Continental shares recover from viral videos of a doctor being savagely dragged from an overbooked airliner, the S&P500 is following the DJIA down below its 50-day moving average. The US bureau of Labor Statistics yesterday reported 5.7 million job openings in February, a better-than-expected increase; and the Redbook Research Company showed a 0.9% increase in same-store sales growth for April 7th after the previous MoM’s 0.7% decline.
European markets continue to trend sideways with a slight bearish inclination as French elections loom and the Easter weekend approaches. The FTSE managed to hold on to its quarter percent gain yesterday as inflation remained above target and CPI was marginally higher than expected. Retail figures were weak. German economic sentiment came in at its highest in 2 years – 19.5, and current sentiment at a whopping 80.1. But the zone’s industrial output fell unexpectedly in February, which is out of line with optimistic sentiment indicators.
With North Korea making warlike sounds, the yen is at a 5-month high and Asian markets slipped overnight – the Nikkei by more than a percent as corporate goods came in better than expected and machinery orders below. This morning, BoJ Governor Kuroda said the yen would have to decline for a 2% inflation rate to be achieved. Chinese equities managed to gain some strength but ended the session down a fraction as the consumer price index rose just under a percent – this after producer prices were up for the 7th month in a row in March. Auto sales in China are down after the hiking of purchase taxes by a half last year. Chinese news is affecting its main trading partner, Australia, where the Westpac consumer confidence index came in this morning at -0.7% following March’s 0.1% gain.
Oil is up on yesterday’s API report of a 1.3mB draw of crude oil – the most since December – plus unsubstantiated reports on Saudi Arabia and OPEC’s extension of the oil production freeze. Reuters reported yesterday that producers cut production by more than their pledges in March.
Gold too is at a post-election high, primarily on geopolitics, and has broken through the 200 day moving average and technical support at 1275, after banking stocks lost all 2017-related gains. And Bitcoin is at a 3-week high after Russian officials said they might recognize the crypto currency as legal tender.
And finally, good news for commodities in general: they can now be used as collateral for loans from Zimbabwe’s central bank. The country’s parliament has just passed a law according to which commercial banks will be forced to accept cattle, electrical appliances and vehicles as collateral for loans to informal businesses.
|8:30 AM GMT||UK: Unemployment & average earnings|
|12:30 PM GMT||US: Import & export prices|
|2 PM GMT||Canada: Interest rate decision|
|2:30 PM GMT||EIA Crude oil inventories|
|1 AM GMT (+1)||Australia: Consumer inflation expectations, followed at 1:30 by unemployment & participation rate|