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Daily Briefing – Wednesday, August 16, 2017

Europe

European equities continued to rise on Asian optimism yesterday despite a slowdown in German growth figures. The pound lost strength on poor inflation but retail prices posted a better-than-expected 3.6% increase. And following through on its finance minister’s threats against the ECB, Germany yesterday announced it was petitioning the European Union’s Court of Justice against the Union’s continued bond-buying program, saying its current QE efforts are illegal. Schaubel actually came out in favor of the ECB this morning saying describing its task as hellish.

 

US

US indexes ended the session in the red and the USD rebounded slightly yesterday after retail sales were reported at an 8-month high – an 0.6% increase for July – and the NY Fed’s manufacturing index surged to a 3-tyyear high of 25.2. Business inventories disappointed with a 0.5% rise. Today, NAFTA talks between the US, Canada and Mexico begin amidst Trumpian discord and the US administration’s failure so far on the healthcare and tax reform arenas.

 

 

 

 

Asia

China posted a 9.2% drop in M2 money supply – an indication that the nation’s shadow banking system may be shrinking. Elsewhere throughout the continent, equity trading was mixed due to Korean tensions on one hand and strong earnings on the other. Australia posted record-low wage growth for Q2 as utility costs rise and despite yesterday’s upbeat minutes from the country’s central bank.

 

Commodities

After posting a 70% surge since the start of the month, Bitcoin corrected back in Asian trading from its $4400 high, losing $500 in a matter of hours. Oil, after nearly hitting a $46 low, bounced back on last night’s API 9.2mB draw – an 11-month record – and is currently at the upper 47s.  And gold continues to slide on post US retail data dollar strength.

 

Shares

Earnings today include Cisco, whose expected $0.55 EPS is down by 3 cents from last year. Tomorrow, Alibaba is expected to ride the waves of increased spending in China.

 

 

Today’s Events

8:30 AM GMT UK: Unemployment and Earnings
9 AM GMT EU: GDP
12:30 PM GMT US: Housing and Mortgage Applications
11:50 PM GMT Japan: Trade Balance
1:30 AM GMT (+1) Australia: Unemployment & Participation Rate

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